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New Zealand Rugby Union loses US$3.4 million

New Zealand Rugby Union loses US$3.4 million

International currency fluctuations contributed to the New Zealand Rugby Union's 4.8 million New Zealand dollar (US$3.4 million, euro2.5 million) loss in 2006, chief executive Chris Moller said Wednesday.
The result, better than its budgeted loss of NZ$5.2 million, compared with a NZ$23.7 million profit in 2005.
Moller said the "significant and rapid" increase of the New Zealand dollar against the US dollar and British pound in the last months of 2006 had eroded the financial position.
"This result highlights the fact that, with two-thirds of our revenue generated in foreign currency, we are vulnerable to exchange rate movements and, like many other New Zealand organizations, our results are very sensitive to the high value of the New Zealand dollar being experienced at the present time," Moller said.
He said the union had built up financial reserves of NZ$77 million to absorb such losses.
"Our reserves are there to cover these sorts of external eventualities and allow us to continue to fund our key activities and investments, such as the Community Rugby program and the funding of Provincial Unions and national competitions," Moller said.
The union's financial outlook for 2007 still depended on currency fluctuations.
"If the 2007 calendar year was to end with the New Zealand dollar at the level it is today (approximately US 70 cents and 35.5 British pence), the NZRU would incur a loss of up to NZ$10 million," Moller said.
"In stark contrast, however, if the New Zealand dollar weakened to the levels predicted by many observers by the end of the year, the NZRU would break even in 2007," Moller said.
"Such a huge swing clearly demonstrates the challenges that the NZRU faces in managing its financial results on an annual basis and underlines the need to take a medium term view of its financial position in the best interests of maintaining and continuing to grow rugby in New Zealand."


Updated : 2021-04-14 14:12 GMT+08:00