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July 28, 2006 – Fuji Photo Film Co., Ltd. announced the company’s first quarter financial results, reporting a profit loss of 49.5 percent.
Fuji, the second largest film manufacturer after Kodak, reported an operating profit of 15.74 billion yen ($135.9 million USD) in the three-month quarter, ending June 30, down from 31.2 billion yen ($272 million) this time last year, according to today’s press release from Fuji. The sharp decrease of nearly half their profits comes as a result of Fuji’s overhaul of film production.
Because of rising prices of silver for film and aluminum for printing plates, Fuji announced in May to increase the prices of photosensitive products. The high costs of raw materials, coupled with sliding demands for film, led Fuji to restructure their photographic film manufacturing.
"The increasingly general popularity of digital cameras caused a decrease in sales of color films," stated Fuji’s press release, "and Fujifilm responded to this trend by implementing global reforms in its film operations."
With the "structural reform," as Fuji called it, the company reduced the number of employees and spent 11.9 billion yen ($103.7 million) in severance pay, according to the release.
Even with the loss of operating profits this quarter, Fuji reported a slight revenue growth of 5.1 percent with 656.85 billion yen ($5.72 billion). Fuji made revenue gains with the current depreciation of the yen. Fuji also reported strong sales with the FinePix F30 that debuted with a 3200 high ISO sensitivity in May of this year.
The company predicts a turn around of 14 percent profit gain by the end of the fiscal year in March 2007, according to Reuters. Fuji also plans to shift manufacturing operations to China, stated their release.
Fuji and Kodak remain the last two major film manufacturers in the industry since Konica Minolta’s pull out earlier this year, according to Reuters.