Net Profits of US$10.3 Million for 2005
1 March 2006
Richina Pacific Limited Reports Net Profits of US$10.3 Million for 2005
Statement by John L. Walker, Chairman of Richina Pacific Limited
[All Dollars are US$ unless otherwise stated.]
Richina Pacific Limited (RPL) reported audited net profits of $10.3 million for the year ended December 31, 2005, up 32% from the net profits of $7.8 million for the year 2004. Earnings per share were 6.82 cents, as compared with 5.39 cents for the prior year. Trading revenues for 2005 were $504.6 million, as compared with $423.9 million for 2004.
Net profits for the 4th quarter of 2005 were $7.4 million, in line with expectations that were reported to shareholders at the end of the 3rd quarter.
At year-end 2005, Richina Pacific maintained a strong balance sheet with total equity at $83.9 million, up from $65.4 million at year-end 2004. Total assets at year-end 2005 were $258.8 million, up from $217.0 million at year-end 2004. Cash balance was a healthy $31.4 million with debt outstanding at $27.3 million.
The record profit results are based on the outstanding contributions made by the Richina Financial division, which more than offset the recognition of losses within the Richina Land division. Further, no taxes were provided for in 2005, the 2005 results reflecting a gain from an over-provision for taxes of $3.0 million in 2004.
As previously reported, RPL’s New Zealand-based construction and development subsidiary, Mainzeal, experienced significant, and unexpected, losses on two major projects in Auckland. The RPL and Mainzeal Boards and management believe that these losses have been provided for in the results for 2005. Steps have been taken to ensure that such losses do not occur in the future and Mainzeal is expected to have a significant turnaround in the current year.
Notwithstanding these results, the Board has determined that the Company’s overall financial position, which has been adversely impacted by the performance of Mainzeal, does not allow the payment of a dividend this year. The Company’s profits were non-cash gains and do not reflect positive results from the Company’s operating businesses. Having resumed the payment of dividends last year, the Board is deeply disappointed and greatly regrets this outcome but believes that the necessary steps have been taken to ensure that the operating businesses achieve profits in the current year and going forward.
The Board looks forward to discussing the 2005 results with the shareholders at the Annual General Meeting scheduled for May 18, 2006, in Auckland. A detailed discussion of these results, the events of the past year and the Company’s future plans will be included in the 2005 Annual Report, which will be sent to shareholders by March 31, 2006.