Results show positive start for ElderCare

Auckland - Thursday, 12 August 1999 - Initial results for retirement home operator ElderCare New Zealand, the company acquired by the former New Zealand Petroleum Co Limited, are ahead of target.

ElderCare exceeded its budget by 11% for the month of May 1999.

The acquisition of ElderCare was effective 1 May 1999.

While the ElderCare business made a profit of $317,000 for the month of May, the New Zealand Petroleum oil and gas business (which has been discontinued) made a loss of $3.642 million for the twelve months ending 31 May 1999, giving an overall consolidated loss of $3.325 million.

This result is an improvement from the forecast set out in the Information Memorandum dated 14 May 1999, as detailed below.

Condensed statement of financial performance (audited)

Year ended 31 May 1999 ($000s)
New Zealand Petroleum Twelve months
ElderCare One month (May 1999)
Consolidated Actual Forecast Actual Forecast Actual Forecast

Total Revenues $ (2,358) $ (2,370) $ 1,538 $1,526 $(820) $(844)

Net profit (Loss) $(3,642) $ (3,826) $317 $284 $(3,325) $(3,542)

The results for the month of May are the first indication of the company's potential in the retirement care industry.

CEO David Lowry said the results validate the acquisition of ElderCare by New Zealand Petroleum.

"The results are positive for the listed company and reflect its solid earnings base," he said.

"Going forward, our aim is to strengthen our competitive position by increasing the number of beds under management.

We will do this by taking advantage of a mix of acquisition, development and management opportunities to extend our coverage and maximise shareholder value.

" Chelsea Acquisition confirmed ElderCare today also confirmed as unconditional the purchase of the 4.2 hectare Chelsea site on Auckland's North Shore for $2.5 million.

The purchase will settle in late September.

The Chelsea site will be used to build a 100-bed hospital and associated units for the elderly.

It occupies a prime location, adjacent to the site of an independent, private retirement village, which will have 156 villas and 80 apartments.

"The Chelsea acquisition positions us as the preferred supplier of medical care for the future occupants of this village and fits with our policy of creating a continuum of care for residents," said Lowry.

"In addition, the acquisition gives us the option of using the land for future growth, since the hospital will only occupy a quarter of the purchased site.

" Once completed, the hospital will increase the number of beds under ElderCare management to 870.

Construction is expected to begin in 2000.

Company Background ElderCare New Zealand Limited, (NZSE: ELD) is a retirement care provider.

It owns a substantial portfolio of nursing homes and assisted living facilities throughout New Zealand at which they offer broad and varied services for the healthcare needs of elderly.

ENDS

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