Fujifilm reports its quarterly profit fell 50 percent, due to restructuring and raw material costs

Fuji Photo Film Co. Ltd., Tokyo, Japan, said its quarterly profit fell 50 percent, hit by restructuring costs and high raw material prices, but it stuck to its full year forecast for a profit gain of 14 percent, reports Reuters.

Fuji Photo plans to book about ¥80 billion (US$691 million) in charges this business year to March as it scraps production capacity for photographic film and cuts thousands of related jobs, setting the stage for a possible recovery next year.

"Our restructuring has been proceeding well and we plan to completely finish it this financial year," Chief Financial Officer Toshio Takahashi told a news conference.

Earnings have also been weighed down by soaring prices of raw materials, such as silver used to make film and aluminum used in the production of printing plates, overshadowing positive external factors like the softer yen, says Reuters.

Fuji Photo said group operating profit came to ¥15.74 billion (US$135.9 million) in the three months to June 30, down from ¥31.2 billion a year ago. Fuji Photo's revenues rose 5.1 percent to ¥656.85 billion in the quarter, reflecting demand for film used in liquid crystal displays, as well as strong sales of printing plates and a handful of acquisitions made in the past year.

For the full year to next March, Fuji Photo stuck to its forecast for an operating profit of ¥80 billion, up from ¥70.44 billion a year earlier, which is below the market consensus of ¥89.5 billion. The company is aiming for a sharp rebound in profit to ¥200 billion in the year to March 2008.

Fuji Photo and Eastman Kodak Co. will soon be the only two major producers of photographic film left as rival Konica Minolta Holdings Inc. decided earlier this year to pull out of the market due to slumping demand.