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Richina Pacific 3rd Quarter Results

Published: Thu 17 Nov 2005 10:30 AM
November 16, 2005
MEDIA STATEMENT
Richina Pacific 3rd Quarter Results
Statement by John L. Walker, Chairman of Richina Pacific Limited
[Note: All currency amounts are in US dollars.]
The Directors of Richina Pacific Limited today reaffirmed their previous forecast that for the full year 2005 they expect the Company will report net profits exceeding its 2004 record net profits of $8.2 million. This is despite the small loss of $234,000 for the 3rd Quarter of 2005. Revenues for the quarter were $133.9 million.
The cumulative results for the nine months ending September 30, 2005 were total revenues of $377.5 million and net profits of $4.2 million, being a similar result to the same period last year.
Within the Richina Land sector, Mainzeal continues to suffer losses from the Scene Apartments and the Auckland Arena projects. The Directors believe that there are remaining uncertainties surrounding the final outcomes of these two projects. As a result, despite the fact that the other activities of Mainzeal and Richina Land are performing to expectations, an overall loss in this sector is now forecast for the full year 2005.
Richina Industries continues the important and far-reaching restructuring and consolidation in its Shanghai tanning operations, which have led to a number of significant personnel changes. Under new leadership, the upholstery leather tanning division has been stabilized, although there will be a sizeable loss arising from old stock disposal and provisions. The production volumes for auto leather are increasing at a fast pace, while the ovine garment and the bovine shoe operations are both below their quarterly forecast expectations. The remaining manufacturing activities of Shanghai Leather Corporation are performing ahead of forecasts. However, with a traditionally slow 4th Quarter, Richina Industries is now forecasting an overall loss for the full year 2005.
Within Richina Services, the strong growth trend at the Blue Zoo (BZB) operations in Beijing continues with growing visitor numbers and higher yields resulting in increased operating profits and cash flow. For the full year 2005, BZB is expected to significantly improve on its performance over last year.
The activities of Richina Financial were again profitable in the 3rd Quarter, and its planned activities underway provide the expectation that in the final quarter of this year it will be more profitable and will generate the bulk of the forecast annual profits for the Company.
The unique issues that arise from operating businesses in China continue to be a challenge that the Company’s management addresses on a daily basis.
These challenges, however, also provide the opportunity for the use of the Company’s skills to generate acquisition surplus on an ongoing basis, and this is expected to continue.
The 3rd Quarter operating results, while below expectations, colour the progress that is being made in establishing for the longer term a group of successful operational sectors, but much work remains.
ENDS

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