Dow Jones Business News -- March 27, 1997
China Resources Puts 4Q Net
At $750,000 To $1M
By HUE HA
Dow Jones News Services
NEW YORK -- China Resources Development Inc.
(CHRB) said it expects fourth-quarter earnings to
increase to a range of $750,000 to $1 million.
The company, which will release results Tuesday,
netted $715,000 in the year-ago period. Per-share
earnings aren't available because the company
underwent a 1-for-10 reverse stock split Jan. 16.
Edward Wong, chief financial officer of the Hong
Kong rubber and agricultural raw materials
company, told Dow Jones revenue will be flat
because the company reduced rubber volumes as
rubber prices fell.
Profits will rise, however, because the company
''channeled the funds'' to more agriculture raw
materials such as coffee, tea and fruits, which have
higher margins, he said.
Fourth-quarter earnings also will reflect the initial
benefits from a restructuring at its 56%-owned
subsidiary, Hainan Agricultural Resources Co.,
which conducts its operations and businesses in
China.
The Hainan Farming Bureau, controlled by the
Chinese Ministry of Agriculture, owns the remaining
44% of Hainan Agriculture.
On March 17, China Resources announced the
completion of the Hainan Agricultural restructuring,
which is designed to streamline management,
reduce overhead and improve efficiency.
Profits have been soaring this year, with net income
for the nine months ended Sept. 30 rising 118% to
$3.5 million from $1.6 million.
Sales dipped 2% to $155 million for the nine
months, as rubber revenue dropped to 76% of total
revenue, compared with 90% of total revenue a year
earlier.
China Resources maintains its accounts in U.S. and
Hong Kong dollars. Hainan Agricultural and
operating subsidiaries keep accounts in the
Renminbi, the Chinese currency. The exchange rate,
which the government has vowed to stabilize, has
hovered around 8.3 Renminbi for each dollar since
1995, the company said. |
