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Fujifilm seen snapping up record profit on instant cameras

Fujifilm's Instax instant camera is popular with younger consumers.

TOKYO -- Fujifilm Holdings is projected to achieve a record group operating profit of around 220 billion yen ($2 billion) for the fiscal year ending in March 2017, mainly by boosting sales of instant cameras in the West.

     The black ink likely will exceed fiscal 2015 projections by over 10%, driven chiefly by the imaging solutions segment. The Instax camera, which prints photos as soon as they are shot, has developed a widespread following especially among the younger demographic. The camera's unit sales shot up nearly 30% in fiscal 2015, and the numbers are expected to continue climbing in Asia, Western markets and elsewhere.

     The spread of digital cameras has pushed the instant variety off the market, leaving Instax as essentially the only one available. Because instant cameras require expertise in areas such as manufacturing special-purpose film, potential new competitors find themselves all but shut out and the Instax can maintain high profitability.

     Medical devices have made the Japanese manufacturer's information solutions business robust. Sales of Fujifilm's digital X-ray imaging and diagnostic equipment and endoscopes are increasing in Asia and other regions. The picture archiving and communication systems for hospitals also are surging.

     The document solutions segment, which accounts for nearly half of sales, is expanding business of color multifunction devices and other office equipment, especially in Japan and the rest of the Asia-Oceania region. Orders are brisk for large industrial printers that support digital printing.

     A strong yen is projected to erode profit by about 16 billion yen, but this will be offset by cost cutting at factories and other streamlining. Every 1-yen appreciation against the dollar or euro will squeeze operating profit by 800 million yen.

     The fiscal 2015 exchange rate apparently averaged 120 yen per dollar and 132 yen for each euro. But Japan's currency has advanced around 10 yen against both the American and European peer. Despite those pressures, Fujifilm expects to attain the operating profit target spelled out in the three-year business plan ending this fiscal year.

     The Kyushu region's recent earthquakes forced Fujifilm to suspend operations at facilities in Kumamoto Prefecture that produce film for liquid crystal panels. The company plans to resume operations on a trial basis this weekend at the earliest. Fujifilm is preparing to temporarily shift production to facilities in Kanagawa and Shizuoka prefectures.

     Fujifilm will announce fiscal 2015 earnings April 27. Operating profit is seen surpassing the guidance of 190 billion yen, itself a 10% year-on-year gain.

(Nikkei)

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