Instead of Breaking Even, Ricoh May Record Loss for Fiscal Year

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The Nikkei Asian Review reports that Ricoh Company of Tokyo, Japan, may be considering booking up to $929 million (100 billion yen ) in impairment losses on under-performing North American operations. Earlier this month, Ricoh had forecast that it expects to break even for its fiscal year that will end on March 31, 2018, but that may be change if Ricoh records an impairment loss.

According to the Nikkei Asian Review, the units include U.S. distributor Ikon Office Solutions, which Ricoh purchased for about $1.6 billion in 2008. “Ricoh may record the losses for the current fiscal year ending next month. The Japanese company had nearly 390 billion yen in goodwill and intangible assets from such acquisitions on the books at the end of 2017,” according to the Nikkei Asian Review.

The shift from paper to digital documents in the office in North America and Europe is said to be behind the Ikon losses. In production and commercial printing, many competitors are said to be compounding Ricoh’s problem.

Last year, Ricoh began restructuring, which including some 5,000 job cuts, primarily in Ricoh’s biggest overseas market, the United States, and also stopped the flow of financial aid to its troubled Indian subsidiary, Ricoh India. Ricoh also announced plans to sell its entire stake in Coca-Cola Bottlers Japan Holdings for about 55 billion yen.

Keep in mind, however, that Ricoh published a statement not confirming the Nikkei Asian’s story, and stating that it has not officially announced any impairment losses associated with its North American business. It says it’s in the process of conducting its annual impairment accounting tests, any loss remains unknown at this time, and that it will announce them if and when it identifies them.

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