Xinhua Finance Limited (TSE: 9399) Reports Solid 2007 First Half Results

Xinhua Finance Limited (TSE: 9399) Reports Solid 2007 First Half Results

August 15, 2007

    SHANGHAI, China, Aug. 15 /Xinhua-PRNewswire/ -- Xinhua
Finance Limited ("XFL"; TSE Mothers: 9399; OTC
ADRs: XHFNY), China's premier financial information and
media service provider, today announced business results
for the six months ended June 30. Under International
Financial Reporting Standards ("IFRS"), total
revenue was US$109.5 million, representing a 46% increase
year-on-year, and 7% higher than management forecasts. 
EBITDA was US$12.9 million, a 15% increase year-on-year and
51% ahead of the forecast. Net income was US$90.9 million,
compared to management forecast of US$90 million. Fully
diluted earnings per share (EPS) was US$89.8, compared to
US$5.6 in 2006.

    (Logo: http://www.xprn.com/xprn/sa/200702151700.gif )

    Proforma EBITDA, adjusted to exclude non-cash ESOP
expenses and one-time items, was US$22.6 million, an
increase of 72% over US$13.1 million in the same period
last year.  Proforma net income was US$6.5 million for the
first half of 2007 compared to US$8.0 million in the first
half of 2006. Proforma net income for first half of 2007
reflects all the exclusions of proforma EBITDA, and
excludes the non-cash one-time gain from changes in equity
interest of $97.5 million, and non-cash finance costs.  The
decline in proforma net income from first half of 2006 was
primarily due to an increase in intangible asset
amortization arising from acquisitions in the distribution
business and interest expense.  XFL provides proforma
results to help investors better understand the Company's
underlying operating and financial trends.

    XFL CEO Fredy Bush said, "We are pleased to see
the success of our content and distribution strategy.  As
is evident from the results, our plan of leveraging our
proprietary content onto our distribution platforms in
China is creating new areas of revenue and growth for
Xinhua Finance.  Today, more than 50% of our revenue and
more than 60% of our EBITDA is coming from our China
businesses.  We will continue to build on our unique
position in both content and distribution in China to
maximize the opportunities in this fast growing financial
market."  

    CFO David Wang said, "XFL has continued to
successfully leverage its proprietary content and
distribution platform as displayed by its first half
results exceeding management forecasts.  We revised the
half year guidance upward in compliance with the Tokyo
Stock Exchange's requirements.  Our prior net income
forecast included an expense provision to take into account
possible non-cash impairments which did not occur in the
period.  We continue to provide for possible non-cash
impairments in the second half of the year.  Therefore, we
maintain our full year net income forecast for the year at
US$57.3 million."

    "Each of our service lines continues to display
strong growth prospects.  We continue to be focused on
effective integration of our businesses worldwide and
improving our operational efficiency to support our
business growth.  With strong first half results in line
with management forecasts, we are confident in achieving
our full year forecasts and look forward to robust
performance in the second half," added Mr. Wang. 



    First Half 2007 Actual vs. First Half 2007 Forecast
(1)- unit: million USD 

                           1H 2007 Actual  1H 2007 Forecast
  Variance 
    Revenue                     109.5           101.9      
     7%
    Proforma EBITDA (2)          22.6            18.4      
    23%
    EBITDA (3)                   12.9             8.6      
    51%
    Net Income (4)               90.9            90.0      
     1%



    First Half 2007 vs. First Half 2006 - unit: million USD


                               1H 2007         1H 2006     
 Variance 
    Revenue                     109.5            75.0      
    46%
    Proforma EBITDA (2)          22.6            13.1      
    72%
    EBITDA (3)                   12.9            11.3      
    15%
    Proforma Net Income (5)       6.5             8.0      
   -19%
    Net Income                   90.9             4.9      
  1772%



    First Half 2007 vs. First Half 2006 (Japan GAAP(6)) -
unit: million USD 

                                1H 2007        1H 2006     
 Variance 
    Revenue                      109.5           75.0      
    46%
    Proforma EBITDA (2)           22.5           13.4      
    68%
    EBITDA (3)                    10.0           11.1      
   -10%
    Proforma Net Income (5)        0.7            0.4      
    55%
    Net Income                    89.4            2.0      
  4345%



    (1) For six months ended June 30, 2007 results and six
months ended June     
        30, 2006 results at current Japanese yen exchange
rate, the amounts in 
        Japanese yen are calculated by the foreign currency
exchange rate 
        (middle rate), being US$1.00 = JPY 123.26, from the
Tokyo Foreign 
        Exchange Market as of June 29, 2007.
    (2) Proforma EBITDA under IFRS is EBITDA plus non-cash
ESOP expenses and 
        excluding one time items.  Proforma EBITDA under
JGAAP is EBITDA plus 
        non-cash ESOP expenses and recurring non operating
income and 
        excluding one time items. 
    (3) Under IFRS, EBITDA for the six months ended June
30, 2007 includes 
        non-cash one time charge of US$5.7m from the
revaluation of a 
        convertible loan, one time legal expenses of
US$0.6m and non-cash ESOP 
        expenses of US$3.3m. Under JGAAP, EBITDA for the
six months ended June 
        30, 2007 includes non operating income of US$10m,
one time legal 
        expenses of US$0.6m and non-cash ESOP expenses of
US$2m. 
    (4) Reforecast on August 14, 2007
    (5) Under IFRS, Proforma net income for six months
ended June 30, 2007 
        excludes a one-time gain of US$97.5m from the
deemed disposal of a                    
        subsidiary, a non-cash one time charge of US$ 5.7m
from the 
        revaluation of a convertible loan, non cash finance
costs of US$3.5m, 
        one time legal expenses of US$0.6m and non-cash
ESOP expenses of 
        US$3.3m. Under JGAAP, Proforma net income for the
six months ended 
        June 30, 2007 excludes a one-time gain of US$100.7m
from the deemed 
        disposal of a subsidiary and related share issuance
expenses of 
        US$9.4m and non cash ESOP expenses of US$2m
    (6) The main reason for the differences between IFRS
and Japan GAAP as 
        applied to us is that Japanese accounting standards
take a different 
        approach to accounting for amortization of goodwill
from acquisitions 
        and share issuance expenses.

    (Notes)
    A. We define EBITDA in relation to our IFRS financial
statements as profit 
       or loss before interest, tax, depreciation and
amortization.
    B. We define EBITDA in relation to our JGAAP financial
statements as 
       operating income or loss plus depreciation,
amortization and 
       amortization of goodwill. 
    C. Forecasts for fiscal 2007 are management estimates
only; figures have 
       not been audited or reviewed. 
    D. 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 ("XFL") is China's
premier financial information and media service provider
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's
proprietary content platform, comprising Indices, Ratings,
Financial News, and Investor Relations, serves financial
institutions, corporations and re-distributors worldwide. 
Through its subsidiary Xinhua Finance Media Limited
(Nasdaq: XFML), XFL leverages its content across multiple
distribution channels in China including television, radio,
newspaper, magazine and outdoor media. Founded in November
1999, XFL is headquartered in Shanghai, with offices and
news bureaus spanning 11 countries worldwide.   

    For more information, please visit
www.xinhuafinance.com . 

    This is a press release to the public and should not be
relied on as information to make an investment decision by
any investor. Investors should read the Company's
Securities Report filed to the Tokyo Stock Exchange and
consider the risk factors together with other information
contained therein when making an investment decision.  This
press release contains some forward-looking statements that
involve a number of risks and uncertainties.  A number of
factors could cause actual results, performance,
achievements of the Company or industries in which it
operates to differ materially from any future results,
performance or achievements expressed or implied by these
forward-looking statements.




   For more information, please contact: 

    Xinhua Finance
     Hong Kong/Shanghai
     Ms. Joy Tsang
     Tel:   [phone],
[phone]
     Email: [e-mail]

    Taylor Rafferty (IR Contact)
     Japan 
     Mr. James Hawrylak
     Tel:   [phone]
     Email: [e-mail]

     United States
     Mr. John Dudzinsky
     Tel:   [phone] 
     Email: [e-mail]