'Slow global e-book growth' hits Kobo targets

'Slow global e-book growth' hits Kobo targets

Rakuten recorded a 7.8bn yen (£47m) impairment charge for its Kobo division, according to its financial results for the three months to end December 2015.    

The company said Kobo "has been impacted by a slower start to the rise of the global e-book industry than we originally expected, and hence its business plan fell behind original targets."

However the company said the financial results of e-book platform OverDrive Holdings, which Rakuten acquired in 2015, had been "rapidly improving" and it expected EBITDA of its e-book business "to return to the black in the fiscal year ending December 31st 2016".

Rakuten told Publishers Lunch "Slower than expected growth in English language e-book markets has resulted in an adjustment to Kobo's long-term value. Rakuten's commitment to the e-book market and its confidence in the mid-term outlook is evident in the purchase of OverDrive and continuing investments in Kobo's global growth".

The company added: "Kobo is poised for a strong year this year both in terms of growth and continuing profitability improvement. In fact, in January we saw the strongest single-month content sales in our history while our device business is more profitable than ever. We are very confident in Kobo's place in the future of e-books."

Rakuten saw total revenue across 2015 rise nearly 20% year-on-year to 713.6bn yen (£4.4bn).

Its Kobo impairment charge was part of a total 38.1bn yen (£233m) impairment charge for the company during 2015.