2007'02.01.Thu
Xinhua Finance Achieves Full Year Profitability

February 14, 2006

Record Revenue, EBITDA and Net Income Exceed Forecasts for the Full Year 2005
SHANGHAI, China, Feb. 14 /Xinhua-PRNewswire/ -- Xinhua Finance (TSE Mothers: 9399; OTC ADR: XHFNY), China's unchallenged leader in financial information and media, today reported net income of US$10.3 million for the full year 2005 under International Financial Reporting Standards ("IFRS"). Net income was significantly ahead of the full year forecast, which was revised upward in December 2005 to US$9.0 million. The company has continued to see significant growth across its global service lines. The record financial results for the full year are further evidence that management's focused strategy for profitable growth is driving shareholder value and that Xinhua Finance is well-positioned to capitalize on its promising business prospects in China and worldwide. Total revenue for the full year ended December 31, 2005 was US$110.0 million, an 84% increase over the full year 2004, surpassing the forecast of US$105.7 million by US$4.3 million or 4%. EBITDA, an important international measure of high growth companies such as Xinhua Finance, was US$21.2 million, a 364% increase from prior year EBITDA of US$4.6 million, beating the US$16.7 million forecast by 27%. Fredy Bush, CEO of Xinhua Finance, commented, "We are proud to have surpassed our full year revenue and EBITDA targets to deliver net income significantly ahead of expectations. Fiscal 2005 was a landmark year for Xinhua Finance, both financially and operationally. Continued strong demand for our China products as well as positive developments in China's regulatory environment drove growth across all of our business lines. We have seamlessly integrated our recent acquisitions into the group, and they already are strengthening our product portfolio and contributing to bottom line profit." "Looking forward to 2006, we expect to continue to advance our strategy to extend our distribution capabilities in China and penetrate the financial media sector. Our core businesses continue to grow. By improving the quality and depth of our proprietary content, we are creating additional leverage to develop these financial media distribution channels and diversify into new and lucrative revenue streams." CFO Gordon Lau added, "Xinhua Finance achieved record financial performance in fiscal 2005. Revenue, EBITDA and net income were at all time highs, a direct result of our disciplined approach to expand our margins and drive operational efficiencies. EBITDA margin for the full year 2005 more than doubled from 7% in fiscal 2004. Given our continued strong performance and the robust demand for our China products, we are confident in achieving our full year 2006 forecasts." Full Year 2005 results vs. forecasts - unit: million USD 2005 forecast 2005 actual % change Revenue 105.7 110.0 4 % EBITDA 16.7 21.2(1) 27 % Net Income 9.0 10.3 14 % Full Year 2006 forecasts - unit: million USD For 6 months For the year Revenue 74.7 166.0 EBITDA 11.5 25.6 Net Income 6.4 13.8 Full Year 2005 results (Japan GAAP(2)) - unit: million USD 2005 actual Revenue 110.0 EBITDA 18.8(1) Net Income (loss)(3) (2.8) (1) For FY2005 IFRS Reported EBITDA of US$21.2 mn and Japan GAAP Reported EBITDA of US$18.8 mn, the difference includes US$1.5 mn of one-time forex and sale of non-core assets gains, and US$0.9 mn of other GAAP reconciliatory items. (2) The main reason for the discrepancy between IFRS and Japan GAAP is that Japanese accounting standards take a different approach to accounting for goodwill from acquisitions. (3) Includes one-time charges of USD$4.4 million associated with fundraising activities. (Notes) A. We define EBITDA in relation to our IFRS financial statements as profit (loss) before interest, tax, depreciation and amortization. B. Forecasts for fiscal 2006 are management estimates only; figures have not been audited or reviewed. C. Performance estimates are determined based on information currently available. Due to unforeseen factors, actual performance may differ from estimates. About Xinhua Finance Limited Xinhua Finance Limited is China's unchallenged leader in financial information and media, and is listed on the Mothers board of the Tokyo Stock Exchange (symbol: 9399) (OTC ADRs: XHFNY). Bridging China's financial markets and the world, Xinhua Finance serves financial institutions, corporations and re-distributors through four focused and complementary service lines: Indices, Ratings, Financial News and Investor Relations. Founded in November 1999, the Company is headquartered in Shanghai with 18 offices and 21 news bureaus across Asia, Australia, North America and Europe. For more information, please visit http://www.xinhuafinance.com . For more information, please contact: Xinhua Finance Japan Mr Sun Jiong Tel: +81-3-3500-5328 Email: jsun@xinhuafinance.com China Ms Joy Tsang Tel: +86-21-6113-5999, +86-136-2179-1577, +852-3196-3983, +852-9486-4364 Email: joy.tsang@xinhuafinance.com Taylor Rafferty (IR Contact) Japan Mr. James Hawrylak Tel: +81-3-5733-2621 Email: james.hawrylak@taylor-rafferty.com United States Mr. Brian Rafferty Tel: +1-212-889-4350 Email: xinhuafinance@taylor-rafferty.com SOURCE Xinhua Finance Limited
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