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Richina On Track For Profit

Richina Annual Meeting

Richina Pacific Limited is headed for a profitable year on the back of strong first half operational improvements and restructuring gains.

Chairman Sir Allan Wright told the company’s Annual Meeting in Auckland today that Richina Pacific was trading ahead of last year across all its businesses.

“The Company is on track for a first half profit significantly ahead of last year,” said Sir Allan, who told shareholders that the expectation was for a profitable year.

CEO Richard Yan said Richina Pacific had made significant progress towards the completion of its restructuring programme.

“We’ve sold many non-core assets, significantly simplified and focussed the remaining operating businesses and reduced corporate overhead,” he told shareholders.

“With the restructuring nearly complete, we are now focussed on improving execution in each of the five business units.

“Our two Chinese start-ups have reached critical mass and maturity that makes them meaningful contributors to our future.”

Mr Yan said management had also turned its attention to the balance sheet.

“We aim to reduce the company’s debt burden,” he said.

Asset sales had helped, but further profitability and cash flow gains were needed, along with further overhead reductions.

Wellington Office Development Nearly Fully Tenanted

Richina’s 25-level Wellington office tower, car park and retail development known as Mobil-on-the-Park, is now effectively fully tenanted.

“I’m pleased to confirm that, as of last week, Lucent, the international communications company, joined our impressive list of tenants,” Mr Yan said. “Lucent has leased two floors, and taken an option on the only remaining floor.”

The development is now generating healthy cash flows and providing an “adequate return”, said Mr Yan. A large part of Richina Pacific’s debt relates to the project.

“While we are comfortable holding the Wellington property for now, property development does not form part of our longer term strategic plans.”

“Accordingly we will sell the building when we are able to achieve an acceptable return,” Mr Yan said. “This is not the case under current market conditions, so we will hold until the time is right.”

China’s Entry to WTO Creates New Opportunities

Mr Yan welcomed China’s prospective entry to the World Trade Organisation, saying it was “good for China and good for Richina Pacific”.

The Company’s China operations currently comprise 41% of gross assets and 9% of revenues.

“There is no doubt that membership in the WTO will accelerate the pace of economic reform in China,” he said. “New opportunities for foreign investors will arise and those, like Richina Pacific, who are already on the ground, will find improvements in the way business is being conducted.”

Mr Yan said the recent calming of relations between China and Taiwan also encouraged the Company. Taiwan’s rapid economic growth and peaceful liberalisation “bodes well” for China’s reform programme, he told shareholders.

Overall, Mr Yan said, Richina Pacific is progressing well towards sustainable profits from all its businesses.

Richina’s five operating businesses are: Mainzeal Property and Construction; Mair Venison; Colyer Mair (the company’s New Zealand semi-processed leather business); Shanghai Richina Leather (supplying leather to major international shoe and garment manufacturers); and the Beijing Blue Zoo underwater world aquarium.


For further information:

Sir Allan Wright Richard Yan
Chairman Chief Executive Officer
Phone 64 9 375 2188 Phone 64 9 375 2188

Issued on behalf of Richina Pacific by
Dennis Lynch, Network Communications Phone 09 379 3154

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