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Richina trims profit forecast

Wednesday 25th June 2003

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Pelt quality affecting margins and revenues at Shanghai Richina Leather has caused Richina Pacific to trim its estimated half year operating profit by $700,000 to $3.5 million for the six months ending 30 June, 2003.

Chairman Alastair MacCormick told shareholders at the annual meeting that anticipated sales of garment leather for coats and jackets made in China from New Zealand sheepskin were not generating expected revenue levels, and the margins are lower.

"The quality of this year's pelts, all sourced from New Zealand, was affected by changing seasonal weather conditions, and the quality and size has not been as high as in past years. This has affected the margins achieved on sales."

MacCormick said that the SARS virus had decimated attendance at the company's Blue Zoo aquarium in Beijing, and it was forced to close for six weeks as a precautionary measure.

"While the attraction has now reopened, recovery in attendance numbers will be slow," he said.

"Revenue losses attributable to the closure are likely to be in the order of $1.5 million."

MacCormick told shareholders at the Auckland meeting that with the pro rata rights issue that raised US$10.4 million behind it, the company was poised to forge ahead with its upgrading and expansion plans for the company's Shanghai leather manufacturing operations.

The company was still reviewing its options in relation to registering the company in a jurisdiction such as Bermuda and eventually having its main listing on an exchange such as Singapore.

He emphasised that if this was to happen the company would retain its New Zealand listing and have New Zealand domiciled directors.

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