Ricoh Reports ¥135.5 Billion Loss for Fiscal Year

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Photo credit: REUTERS/Toru Hanai

Ricoh Company of Tokyo, Japan, announced results for its fiscal year that ended on March 31, 2018, including an Impairment losses amounting to ¥145.8 billion incurred by its  Office Printing segment and Office Service segment.

As a result, Ricoh recorded an operating profit loss for its fiscal year of ¥115.6 billion, and profits’ loss of ¥135.5 billion ($1.2 billion U.S.). Ricoh had reported an operating profit for the previous fiscal year of ¥33.8 billion.

Ricoh’s impairment losses stem from Ricoh USA and from Ricoh’s IT services company in the United States, mindSHIFT Technologies. Ricoh took these impairment losses of ¥175.9 billion into account when calculating results for its fiscal year that ended on March 31, 2018. For more information on these impairment losses, see “Ricoh to Record ¥23.1 Billion Extraordinary Loss.”

Ricoh’s sales for the year also slowed, increasing by 1.7 percent as compared to the previous fiscal year, to ¥2,063.3 billion.

Review by Region and Business Group

Sales in the Americas decreased by 5.2%, while sales in Europe, Middle East and Africa increased by 4.6% and sales in Ricoh’s Other region, which includes China, Asia and Oceania, increased by 6.4%

Office Printing

Sales in the Office Printing segment decreased by 1.9% to ¥1,144.0 billion as compared to the previous fiscal year. Ricoh says that although foreign exchange-rate fluctuations brought an increase in sales, however, overall sales decreased mainly due to the sales slump in the Americas.

Office Service

Sales in the Office Service segment increased by 5.3% to ¥447.9 billion as compared to the previous corresponding period because sales of IT products and communication services grew mainly in the domestic market.

Commercial Printing

Sales in the Commercial Printing segment decreased by 0.1% to ¥185.9 billion as compared to the previous fiscal year, mainly due to the decrease in sales in the Americas, whilst foreign exchange-rate fluctuations increased sales after translation into the reporting currency.

Industrial Printing

Sales in the Industrial Printing segment increased by 61.6% to ¥19.2 billion as compared to the previous corresponding period. Sales in the overseas market of inkjet print heads increased mainly in the Other region.

Thermal Media

Sales in the Thermal Media segment increased by 7.3% to ¥61.4 billion as compared to the previous fiscal year. Sales steadily increased mainly in the Americas and Europe, the Middle East, and Africa and foreign exchange-rate fluctuations brought an increase in sales after translation into the reporting currency.

Other

Sales in the Other segment increased by 12.5% to ¥204.7 billion as compared to the previous fiscal year mainly due to the increase in the number of contracts relating to electricity retailing in the domestic market and the good sales performance of optical equipment.

Forecast

For its fiscal year that will end in March 2019, Ricoh is forecasting that sales will be down slightly (-1.1 percent) and net income of ¥47 billion.

Our Take

In hindsight, it’s a shame that Ricoh’s major investments in the U.S. BTA dealer channel have come back to haunt it, as the 2008 recession unleashed a culture of cost-cutting in most offices where managing the high cost of printing (particularly in toner-based color print and copy – the bread-and-butter of the BTA channel) – became somewhat of an obsession. Who can blame an office manager who is under the gun from the bean-counters for spending $500 for four toner cartridges for a $350 laser printer, much less hundreds of dollars a month for a service/MPS contract for a $10,000+ color copier/MFP?

In addition, the recession spurred an onslaught of user authentication, printer-management, and accounting solutions that were intended to rein in users who print too much (or print too much in color). In essence, it appears that the nickel-and-dime management of printing has spoiled the party for major print vendors such as Ricoh.

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