Luckyfilm Co, China's only photographic filmmaker, posted a sharp fall in profit in 2003 due to the SARS outbreak last spring and the problem of smuggled goods, which hurt its revenue. But the firm is optimistic that its cooperation with Eastman Kodak will ensure a better 2004.

　　Luckyfilm's net profit fell 35.56 percent to 80.02 million yuan (US$9.64 million) last year from a year earlier, the Shanghai-listed company said in its 2003 financial report yesterday.

　　Its revenue shed 4.84 percent from a year earlier to 564.28 million yuan.

　　"The SARS epidemic in the first half of last year and the problem of smuggled goods dragged down our incomes and profits sharply," said the Hebei Province-based company.

　　Industry sources said it is generally known that photographic films of other brands are brought into the country at lower prices than what it costs to make them in China.

　　Luckyfilm's revenue in the first six months of last year decreased 18.68 percent from a year earlier to 275.11 million yuan as the fortunes of the photographic film market usually depend on the tourism sector, it said.

　　China's tourism industry earned a revenue of 487.4 billion yuan in 2003, down 12.4 percent from a year earlier, according to the China National Tourism Administration.

　　Meanwhile, Du Changtao, general manager of Luckyfilm, said the firm will perform better in 2004 banking on its cooperation with Eastman Kodak Co. Kodak announced last month that its investment in Luckyfilm has been approved by the Ministry of Commerce.

　　Luckyfilm signed a 20-year pact with the US photographic film and camera maker last year, under which Kodak will buy a 20 percent stake in Luckyfilm while Kodak will provide technology, training and equipment.

　　Currently, Kodak dominates the China's mainland film market with around 50 percent, while Luckyfilm takes up about 20 percent.