FUJI GROUP PROFITS PLUNGE
FUJI GROUP PROFITS PLUNGE
2006-08-09 at 11:59:00 am #16271
Fuji Photo Film group profit plunges on restructuring costs, slow film sales
TOKYO – Fuji Photo Film Co., which has been restructuring its business as people abandon film cameras for digital ones, reported a 69.9 per cent fall in net profit for the latest quarter on faltering colour film sales.The Japanese company said Friday its net income fell 4.81 billion yen ($41.5 million US) from 15.96 billion yen it earned the same quarter a year ago.Quarterly sales rose 5.1 per cent from the previous year to 656.85 billion yen ($5.67 billion) on brisk sales in its information solutions business and a weaker yen.Those gains were offset, however, by costs related to its ongoing restructuring program, which totalled 27.4 billion yen ($236.3 million) for the quarter.The company said personnel costs weighed especially heavily on its books. Fuji Photo announced plans earlier this year to cut 5,000 jobs by September, or nearly seven per cent of its global workforce. The company paid over 11 billion yen ($95 million) in termination benefits in the latest quarter, it said.The company’s operating profit fell 49.5 per cent in the latest quarter from the same period last year to 15.74 billion yen ($135.8 million).Tokyo-based Fuji Photo has been spending heavily to restructure its colour film and digital camera operations.Fuji Photo still makes colour film, but that business is now a fraction of its overall operations, which include printers, copy machines, data storage products, digital cameras and flat panel display materials.The company’s colour film sales slumped in the latest quarter, contributing to a 10.8 per cent decline from the previous year to 149.9 billion yen ($1.29 billion) in its imaging products business.Fuji Photo’s new higher-end FinePix F30 camera, launched in May, saw strong sales, but entry-level models struggled amid intense price competition, particularly in North American and European markets, the company said.Fuji Photo will continue to scale back its film business and concentrate on higher-end cameras to maintain profitability, it said, adding it may shift some manufacturing operations to China.Meanwhile, sales of flat panel display and data storage products surged 19.9 per cent to 233.6 billion yen ($2.01 billion) on strong global demand.Revenue from copiers also rose 4.3 per cent to 273.3 billion yen ($2.35 billion), buoyed by demand in the Asia-Pacific region, including China.Overseas revenue for the quarter climbed 12.2 per cent to 347 billion yen ($2.99 billion) from the same quarter the previous year. Domestic sales dropped 1.9 per cent to 309.8 billion ($2.67 billion).Fuji Photo shares closed 0.8 per cent higher in Tokyo at 3,790 yen ($32.69).