Leather leads Richina to profit

For the year ended December the company has reported a profit of $4.7 million compared with a $3.85 million loss the previous year and a $28 million loss in 1998.

Chairman Sir Allan Wright says the results show the company is now firmly on the right track and has a bright future.

He says the company's earnings surplus in New Zealand jumped 160% to $17.1 million before overheads and interest, and in China the surplus was $2.9 million compared with a $1 million loss last year.

Revenue increased by 26% to $725 million, mainly on the back of a rise in leather operations revenue of 63% and venison, up 27%.

"The New Zealand semi-processed leather operations, successfully amalgamated during the year into a single entity trading under the Colyer Mair name, were the group's main contributor to profit," says Sir Allan.

"A combination of good quality hides and favourable exchange rates saw this business lift turnover by 27% to $138 million. Sales of finished leather from our China operations grew by 134% to exceed $129 million in the 12 months."

However the leather and venison performances were not repeated in the company's other investments, with its Mainzeal subsidiary posted a reduced profit of $2.9 million, down 28%.

The company's Blue Zoo Beijing operation also dropped back significantly, recording a deficit of $37,000 compared to a profit of $934,000 the previous year. The company says the loss is due to fierce price-cutting by competitor aquariums in the Chinese capital.

Richina says a review of its operations, which may include recommendations for further restructuring or realising one or more of its investments, is continuing.

No dividend has been declared.

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