Mainzeal Property & Construction has bounced back from the losses it made last year building Auckland's Vector Arena after appointing a new chief operating officer, according to its owner, Richina Pacific.
John Walker, the New York lawyer who chairs Richina Pacific, told shareholders yesterday the builder had changedthe way it worked under the leadership of Peter Gomm, its new chief operating office.
"Under Peter's leadership, Mainzeal has focused on strengthening its systems, re-establishing the disciplines of 'building right first time' and appointing people to key positions who will assist in improving Mainzeal's performance," Walker told Richina's annual meeting.
"Mainzeal continued to perform strongly in all areas of the country on its many other projects during 2006 which was reflected in the US$4.9 million operating profit," Walker said.
Last year, Auckland-based Mainzeal made a provision of US$7.3 million ($9 million) for losses on the arena and an Auckland apartment block.
The company had suffered big losses putting up the 12,000-seat $80 million arena, Walker said.
Last year, Richina's chief executive Richard Yan described the arena as the most difficult project Mainzeal had taken on in about a decade and that he was moving his family from San Francisco to Auckland in an attempt to stem losses.
In April, the company's annual report showed Mainzeal lost $22.2 million on the arena, almost twice the cost blowout expected a year ago. The arena cost $94.8 million to build instead of the budgeted $72.6 million.
Yesterday, Richina released its half-year result to June, showing it had boosted net profit by a third after improved profitability across its investments.
The company posted an after-tax profit of US$4.9 million ($6.2 million), despite a US$30 million drop in revenue to US$210 million.
Richina has Asian and New Zealand investments, specialising in construction, shoes, automotive and garment leather businesses. The Malaysian-headquartered NZX-listed company has about 3400 shareholders internationally and employs 8800 people.
Walker said the latest result was a big turnaround.
