KEY POINTS:
The company dogged by building Auckland's new Vector Arena released a poor result yesterday, with its profits falling by $3.5 million.
And by the end of this month, it will reveal the full extent of its arena losses.
Richina Pacific, owner of Auckland builder Mainzeal Property & Construction,
made a net profit of $6.3 million, well down on the $10.3 million last year.
The company highlighted the Vector job in its announcement but defended the builder, saying its latest result was a turnaround because the construction business had done well. So had a Chinese leather operation.
Richard Yan, Richina's chief executive, said that despite the Vector Arena, the builder and the leather manufacturer had had a "huge improvement" in their businesses.
"Notwithstanding the significant losses experienced by Mainzeal in connection with the arena project, Mainzeal has contributed profits to the reported net profits of Richina Pacific in 2006," the company said.
Yan said the true extent of Mainzeal's losses on the arena would not be revealed until the annual report was released this month but it was in the "millions and millions of dollars".
"We have written all of it off," he said.
"Our loss is Auckland's gain. Our investors will be disappointed by the enormity of the contribution we made to Auckland, but Auckland should be enormously pleased with the enormity of the contribution we made."
He refused to comment on litigation over the arena and Mainzeal's attempts to recover some of its losses.
Mainzeal had two "bad" jobs in the arena and the Scene apartment blocks on Auckland's waterfront, but the rest of its work had gone well, Yan said.
He would not say if he would attend the arena's opening this month.
John Walker, Richina's New York-based chairman, promised to say more at the company's annual meeting on June 29 in Auckland and in the annual report.
The company will send shareholders the annual report on March 31. Walker called the latest result "a significant turnaround in the company's operations" and mentioned particularly Mainzeal and Shanghai Richina Leather.
"The board believes that with the announced opening of the Auckland arena in March, Auckland will have a magnificent new facility of which all will be proud and the issues associated with that project are very near their ultimate resolution," the company said.
Richina chief executive Yan was in China yesterday.
Shareholders got no payouts.
"The board has determined that the company's overall financial position does not yet allow the resumption of a dividend payment this year," it said.
Earnings per share from the latest result were 4.55c, down on the 6.82c for the year before.
Trading revenue also fell, from $504 million in 2005 to $475.8 million last year.
Net profits for the second half of last year were $3.2 million, which Richina said was in line with expectations that were reported to shareholders earlier last year.
Shares in Richina closed up 1c at 44c yesterday.