A newspaper article has cast doubts over Ricoh’s financial position, although the OEM has rebutted it.
The Nikkei Asian Review has reported that Ricoh is contemplating booking up to ¥100 billion ($936 million/€761 million) in impairment losses on what it calls its “underperforming North American operations.”
These apparently include the American distributor Ikon Office Solutions, bought by the OEM in 2008. The newspaper puts the issue down to the falling demand for printers and copiers in the key Ikon markets of North America and Europe, as a result of businesses moving towards digitalisation, from paper.
Although Ricoh is reportedly expecting “to break even on a net basis” come the end of this financial year, Nikkei Asian Review suggests that “logging an impairment loss may well plunge it into the red.”
Another suggestion as to the root of the cause involves the ongoing MFP boom: “In a way, printer makers have hamstrung themselves with their technological advances. The improving capabilities of multifunction devices – which perform some combination of printing, copying and scanning – mean offices need fewer of them.”
Last year, Ricoh began a restructuring plan that led to 5,000 job cuts, mostly in the United States. According to Nikkei Asian Review, “the company has also stopped financial support to a money-losing Indian arm, and is working to rebuild assets by selling of shareholdings.”
Although the industry itself has realigned greatly recently, with the ongoing Fujifilm-Xerox partnership, and the recent deal between HP and Samsung, Ricoh has thus far kept its changes in-house. For example, the OEM announced its intention recently to offload its stake in Coca-Cola Bottlers Japan Holdings, a local distributor for the soft drink giant.
Yet Ricoh has since responded to the article, implying it is mainly conjecture. In a company statement issued following the original article’s publication, the OEM declared that it was “in the process of conducting its annual impairment accounting tests in accordance with good standard accounting practice.”
The statement continued: “The results of this process are not yet available, so the requirement for any impairment remains unknown at this time. If we need to make any announcements in this regard, we will do so in a timely manner.”
