By NZPA
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Tuesday 27th August 2002 |
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The result was 40 percent lower than the $7 million profit recorded for the same period a year earlier, when the company had two more investments in its stable.
Total operating revenue also declined to $234 million, from $373 million. No dividend was declared.
The performance of Richina's three remaining trading operations -- Shanghai Richina Leather, Mainzeal and Blue Zoo Beijing -- was solid, the company said.
"All three companies have made a contribution to profit and we believe this first half performance is sustainable during the second six months."
If shareholders approve the sale of Richina's Wellington office building Mobil-on-the-Park on September 9, the sale would generate $5 million in net cash flow but not increase the year-end profit for 2002, the company said.
The full benefit of the sale would be felt in the 2003 financial year, when the net cash flow would increase by $21.5 million and profit by $2.5 million.
Other flow on effects of the sale in 2003 would be the loss of $5.5 million in rental revenues, a saving of $2.9 million in interest costs and increased earnings opportunities from the $26.5 million in cash generated.
Shanghai Richina Leather was central to Richina's half year performance, contributing 11 percent of the overall surplus at $6.16 million. Revenue in the division was down slightly at $100.5 million ($107.5 million previously).
Property and construction company Mainzeal also performed well, contributing $3.5 million to the surplus, up 162 percent, on turnover of $130 million ($145 million).
"Given the extremely competitive nature of the construction industry in New Zealand, this improved result reflects the tight focus the company is applying to margins, scheduling and quality," Richina said.
Blue Zoo Beijing booked a profit of $238,000 (against a loss of $758,000 last year) on turnover which declined 4 percent to $2.8 million.
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