Turnaround at Mainzeal as Richina profit rises 15%

Published 30 August 2006

Richina Pacific Ltd said yesterday the Richina Land sector, which includes the New Zealand-based Mainzeal Property & Construction operations, has turned round from the first-half loss it made last year.

Richina Land reported $US1.6 million ebit (earnings before interest & tax) compared to a $US2.8 million loss for the half in 2005.

“This evidences a strong recovery by Mainzeal, reflecting the intensive efforts put in over the last 12 months by the board, senior management & staff,” Richina Pacific chairman John Walker said.

“All regions other than Auckland reported record results. Further provisions have been taken for the Auckland Arena and the Scene apartments projects. The directors’ expectation is that, with these further modest provisions, full losses have been provided for these projects. The forward workload of Mainzeal is a solid $NZ227 million.”

The whole Richina group increased net profit by 15% to $US3.6 million and Mr Walker said it expected to deliver a better second-half result.

First-half revenue rose 2.1% to $US240.2 million, shareholders’ equity was up $US7.4 million (8.9%) to $US91.3 million, of which $US3.2 million came from unrealised currency translation adjustments.Mr Walker said the Blue Zoo Beijing aquarium made a positive contribution, the industries sector (incorporating all Richina’s Chinese manufacturing operations) made $US1.2 million ebit and its financial sector made $US3.4 million ebit.Richina Pacific has total assets of $US261 million and improved its equity ratio from 32.1% a year ago to 35%. Earnings/share increased by 14.4%, from 2.09c to 2.39c/share.

Mr Walker said the losses on the Auckland Arena and the Scene apartments projects were substantially provided for in the prior-year results, but the majority of the cash impacts of those provisions were reflected in the cashflow from operations of the current year. Despite this, the cash & cash-equivalents held by Richina Pacific were $17.9 million at 30 June.He said Richina was investigating & pursuing new ventures in the property sector but these weren’t likely to have a significant impact this year because they required considerable planning & development.

Earlier stories:

2 March 2006: Richina Pacific raises profit despite Mainzeal losses, but cans dividend

19 November 2005: Scene & Arena continue as lossmakers for Mainzeal


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Attribution: Company statement, story written by Bob Dey for this website.

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