Richina focus on China

Richina Pacific are shifting their focus to their Chinese tanning operations after turning in a net operating deficit of $15.3 million last year. The company blamed tough trading conditions in the leather industry for the loss, which compared with a net surplus of $4.7 million the previous year. Another contributing factor was a hefty $18.6 million down grading of their Beijing Blue Zoo aquarium. Revenues for the group fell 11% to $647 million (from $724.6 million) but it included a loss of income due to the sale of Richina's New Zealand tannery and venison processing operations during the year. Richina Pacific warned last December that their second half performance would be well down, and their chairman, Alistair MacCormick, has assured shareholders that trading, at least for their leather and construction companies, was recovering. Richina were building their future around their Chinese leather operations and by the time the company's annual meeting came around in June, they would be able to see more clearly how those operations were performing, said MacCormick. He said the impact of the global economic downturn on leather sales could be seen in the gap between their first and second half results. First half turnover revenues for Shanghai Richina Leather were $108 million compared with a second half of $77 million, and surpluses were $5.5 million compared with a deficit of $2.8 million. However, overall leather sales increased by 43% to $185 million, and the tannery's operating surplus of $2.7 million was only 10% lower than the previous year. MacCormick said trading had resumed to levels above the first half of last year. The company wrote down the value of their aquarium, Beijing Blue Zoo, to $25.6 million after heavy competition from two rivals over entrance fees. Richina's remaining New Zealand operating company, Mainzeal, recorded an operating deficit of $2.3 million compared with a surplus of $2.9 million the previous year. It had made provision of $4 million to cover a potential doubtful debt and was pursuing a number of options to recover all or part of the provision. Mainzeal's turnover remained healthy at $297 million compared to $407 million, the company said. They had in excess of $150 million in secured work on their order books. During the year, Richina sold two New Zealand businesses, Colyer Mair and Mair Venison, for which they obtained prices at the top end of the market. Proceeds were going into cover debt. Total assets were $201 million, compared to $277 million the previous year. Net tangible assets a share were 97c ($1.19 in 2000). No provision had been made for taxation.