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Richina Strides Confidently Into Profit

25 August 2000

Media Statement
Richina Half Year Result


Statement made by Sir Allan Wright, Chairman, Richina Pacific Limited

Richina Pacific has taken another confident stride back into profits, registering an unaudited after tax operating profit of $2.04 million for the six months ending 30 June 2000.

For the same period last year the New Zealand based investment company made a profit of $146,000, and a year end profit on continuing activities of $1.4 million.

The last six months of trading have seen us make a major advancement in returning the company to profitability, but Directors still regard it as modest within the context of where we need to go.

We now need to build steadily on what has been achieved.

A particularly pleasing feature was that all four trading activities - leather processing, construction and development, venison and Beijing Blue Zoo - and our geographic operations in China and New Zealand, traded in surplus.

Operating revenue for the company was at a record $351.6 million, up 34%.

No provision was made for taxation.

Assets in the six months increased by $22 million to $276 million and 40% of the Company’s assets are now China domiciled.

The surplus generated by our China operations - Shanghai Richina Leather and Blue Zoo - was $621,000, up from $9000, on revenue of $57.8 million, up 79%.

To record a useful surplus in China so early in the development of our operations there is a feat few New Zealand companies have emulated.

Blue Zoo’s contribution to the surplus was $485,000 while Shanghai Richina Leather increased sales by 84% to $53.9 million. Shanghai Richina Leather is on target to achieve sales of $100 million for the full 12 months.

Our main product to date from Shanghai Richina Leather has been bovine leather, and this has been used principally by American brand shoe companies who manufacture in China. We have become a world producer of this product in terms of quality and quantity.

We are also having some success selling bovine leather in Europe for upholstery uses.

We are now producing increasing levels of ovine leather for the garment industry, and are selling this into Korea in reasonable quantities.

The surplus generated out of New Zealand operations was $8.2 million (up 36%), from revenue of $293.6 million (up 28%), with the largest contributor to the surplus being our semi-processed leather operations.

Our construction sector, under the Mainzeal brand, was the main revenue generator, at $209 million, up 35%.

Our investment in Wellington’s 22-level Mobil-on-the-Park is generating satisfactory returns and is now effectively fully tenanted. While it is not our intention to be long-term holders of this property we will only seek a sale when its value can be fully realised.

The expectation for the Company is for a continuing improvement in profits for the full year.


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: 64 9 379 3154


Revenue Net Surplus Total Assets
2000 1999 2000 1999 2000 1999
$000 $000 $000 $000 $000 $000
Mainzeal 208,855 154,591 1,296 1,468 112,271 103,811
Leather 120,043 91,282 6,638 5,682 107,486 85,645
Venison 18,584 12,883 1,017 (571) 11,092 13,380
Blue Zoo Beijing 3,911 3,100 485 7 43,921 40,364
Inter-segment Eliminations (707) (4,893) - 16 - -

TOTAL OPERATIONS 350,686 256,963 9,436 6,602 274,770 243,200
- Overheads/Assets 150 745 (1,929) (1,454) 580 1,947
- Interest 96 142 (4,867) (4,432) - -
Discontinued Businesses 630 4,349 (602) (570) 270 12,286

351,562 262,199 2,038 146 275,620 257,433

New Zealand 293,555 228,994 8,213 6,023 165,656 165,658
China 57,761 32,318 621 9 109,384 89,828
Unallocated 246 887 (6,796) (5,886) 580 1,947

351,562 262,199 2,038 146 275,620 257,433

Reconciliation of Net Surplus After Tax
Net Surplus as per Segment Analysis 2,038 146
Taxation - -
Net Surplus as per Statement of Financial Performance 2,038 146


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