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Richina Lifts Profit 228%,

March 1, 2005

Richina Lifts Profit 228%, And Reinstates Dividend

Statement made by John Walker, Chairman, Richina Pacific Limited

Richina Pacific Limited (RPL) increased after tax operating profit by 228% to US$8.18 million for the financial year ending December 31, 2004, and is to resume dividend payments after a gap of 6 years.

Against the background of the Company’s earnings per share increasing to 5.66 US cents, from 2.18 US cents last year, Directors have declared a cash dividend of 2.00 NZ cents per share to shareholders on the register as of March 18, 2005.

The turnaround performance by Richina Pacific was greatly assisted by the acquisition of a controlling 90% interest in Shanghai Leather Corporation (SLC), which brought more than 50 different business enterprises into RPL.

The acquisition has significantly changed the dynamics of Richina Pacific and presents the Company with many new challenges as well as opportunities. Going forward, the Company’s performance will be far less dependent on any one business segment.

To assimilate the diversified SLC into Richina Pacific, the Company is in the process of restructuring its divisional segmentation, and will appoint additional management going forward. A further announcement on a number of initial appointments will be made shortly.

Total consolidated revenues for Richina Pacific in 2004 were US$430.9 million, an increase of 47% over the previous year.

Total consolidated assets at period end were US$217 million, up 106% over the previous year-end.

The Company’s balance sheet has strengthened, and at year-end cash and bank balances were US$33 million (up US$11 million) and net tangible assets per share were 42.9 US cents (up from 33.9 US cents). 2 The Company’s accounts have been prepared to the International Financial Reporting Standards, adopted for the first time last year. Our New Zealand property and construction company Mainzeal made excellent progress, contributing US$2.97 million to Company earnings before interest and tax (EBIT). At yearend,

Mainzeal carried a forward order book of US$310 million, a record for Mainzeal. Our Shanghai leather operations contributed US$4.89 million to EBIT. Within this business, the bovine shoe leather division continued its growth path of recent years and made a strong contribution to EBIT. However, the anticipated on-budget start-up costs associated with the automotive leather operation, and losses by the upholstery and ovine garment divisions, reduced margins.

Directors are reviewing the business plans of the upholstery and garment divisions and anticipate that acceptable returns will be generated from all leather sectors in the years ahead. Beijing Blue Zoo recorded an improved performance, registering an EBIT of US$302,000; and a significant positive cash contribution to the group.

Directors’ focus in the coming 12 months will be on fully integrating SLC’s businesses into RPL, as well as improving the results from these newly acquired operations and from the Company’s existing operations.

The dividend will be paid April 4, 2005, and the strike price for the dividend reinvestment plan will be advised on March 30, 2005.

Our expectation is for further improvements in revenue and profits in the years ahead, and Directors are looking forward to discussing these developments with shareholders at the annual meeting scheduled for May 10, 2005, in Auckland.


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