Ricoh’s Impairment Charge up to US$900m

Sourced from TonerNews

Ricoh, an office equipment producer in Japan is considering to book up to JP￥100 billion(US$940 million) in impairment losses on the underperforming North American operations.

The units include U.S. distributor Ikon Office Solutions. Ricoh may record the losses for the current fiscal year ending next month.

Demand for printers and copiers has declined in Ikon’s key markets of North America and Europe as businesses shift from paper to digital.

Ricoh currently expects to break even on a net basis for the year through March 31. Logging an impairment loss may well plunge into the red.

While Ricoh’s sales largely come from office equipment, the company has so far kept its distance from industry realignment, preferring to make changes in-house.

The spread of the internet, plus handheld devices like tablets and smartphones, is making paper-oriented office equipment redundant. Thus, as one of the Japanese office equipment makers, Ricoh is also confronting this tricky challenge.

According to U.S.-based International Data, shipments of printers, copiers, and multifunction devices shrank 4.1% in 2016 to just under 99.03 million units, among which shipments have declined 26% over nine years. Color printers and copiers are selling well in emerging economies, but cooling demand has caused sales to slump in many western markets. By 2020, the U.S. market is expected to shrink 6.5% from the level in 2015.

It is also believed that in a way, printer makers have hamstrung themselves with their technological advances. The improving capabilities of multifunction devices mean offices need fewer of them.