Migao Reports Fiscal 2013 Second Quarter Financial Results
(firmenpresse) - TORONTO, ONTARIO -- (Marketwire) -- 11/15/12 -- Migao Corporation (TSX: MGO), a China-based specialty potash fertilizer producer, today reported financial results for the three and six-month periods ended September 30, 2012.
Revenues for the second quarter ended September 30, 2012 were $11.7 million as compared to revenues of $66.0 million for the three-month period ended September 30, 2011. For the quarter, the Company reported a net loss of $8.1 million or $0.15 per basic share as compared to net income of $6.0 million or $0.11 per basic share for the same period one year ago. The decline in revenue was impacted by several conditions that include continued weakness in hydrochloric acid market, seasonality of customer purchases, no sales of potassium chloride, and overall lower selling prices.
The net loss was a result of decreased volumes and selling prices of finished goods, which impacted absorption of fixed and variable costs. An inventory provision of $1.7 million made to reflect the valuation of some raw material and some finished goods further impacted earnings.
"After comparing these second quarter results to the pipeline of sales activity including secured contracts, it appears the situation showing signs of improvement," said Mr. Liu Guocai, CEO of Migao. "We have focused our energies on negotiating contracts over the recent period and the success of these activities are proving themselves as evidenced by the increased delivery and production of our core fertilizers. We continue to face margin pressure from the impact of the hydrochloric acid business, however there have been specific industry developments in the Chinese market that should result in some improvement to this business."
For the six months ended September 30, 2012 Migao reported revenues of $48.4 million as compared to revenues of $166.5 million for the six-month period ended September 30, 2011. For the first half of fiscal 2013, the Company reported a net loss of $12.0 million or $0.23 per basic share as compared to net income of $13.7 million or $0.26 per basic share for the same period one year ago.
The Board of Directors of Migao Corporation declared a quarterly cash dividend of $0.015 for each common share, payable on December 13, 2012 to shareholders of record on November 30, 2012. The dividends are eligible pursuant to the Income Tax Act (Canada) and any similar provincial legislation pertaining to eligible dividends.
The Company's gross profit margin of 1.8% for the quarter ended September 30, 2012 was primarily attributed to the decreased sales volume and product pricing. Gross profit margin is expected to improve beginning in the third quarter.
It is anticipated that Sichuan Migao and Liaoning Migao will operate at full capacity for the balance of fiscal 2013. The Company's joint venture potassium nitrate facility is anticipated to be at full capacity for the balance of fiscal 2013, as well as the specialty compound facility at Zunyi Migao. It is anticipated that Guangdong Migao will reach approximately 60-70% of capacity, Changchun Migao at 50-60%, and Shanghai Migao at 50-60% of capacity by the end of fiscal 2013.
At the end of the period, the Company had $49.4 million (98,925 tonnes) of potassium chloride inventory with an average delivered price of $499 per tonne, of which 89,796 tonnes were on hand with the remainder being in transit. In addition, during the quarter, the Company sold 5,075 tonnes of potassium nitrate, 10,931 tonnes of potassium sulphate, nil of compound fertilizer, nil tonnes of potassium chloride, and at the end of the period, the Company had $45.6 million (106,604 tonnes) of finished goods inventory on hand, including co-products.
At September 31, 2012, Migao reported cash and restricted cash of $51.9 million and working capital of $192.1 million.
About Migao
Migao Corporation, through its wholly owned subsidiaries, owns and operates fertilizer production plants in various strategic locations across China for the production and sale of specialty potash fertilizer (potassium nitrate and potassium sulphate) to China's agricultural market. Migao Corporation is subject to, and complies with strict government regulations that govern safety, quality and environmental protection. Migao's Sichuan facility is ISO 14001 certified, an international environmental management standard. Please visit for further information.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This news release may include forward-looking statements within the meaning of certain securities laws, including the "safe harbour" provisions of the Securities Act (Ontario) and other provincial securities laws in Canada. These forward-looking statements include, among others, statements with respect to our objectives and goals, and strategies to achieve those objectives and goals, as well as statements with respect to our beliefs, plans, objectives, expectations, anticipations, estimates and intentions. The words "may", "will", "could", "should", "would", "suspect", "outlook", "believe", "plan", "anticipate", "estimate", "expect", "intend", "forecast", "objective", and "continue" (or the negative or grammatical variations thereof), and words and expressions of similar meaning, are intended to identify forward-looking statements.
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, which give rise to the possibility that predictions, forecasts, projections and other forward-looking statements will not be achieved. Certain material factors or assumptions are applied in making forward-looking statements and actual results, performance or achievements may differ materially from those expressed or implied in such statements. We caution readers not to place undue reliance on forward-looking statements as a number of important factors, many of which are beyond our control, could cause actual results, performance or achievements to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates and intentions expressed in such forward-looking statements. These factors that relate to our company include, but are not limited to: risks related to raw materials; execution of the business plan; expansion plans; dependence on key personnel; key relationships; dependence on key customers; dependence on key suppliers; competition; market factors and volatility of commodity prices; environmental risks and hazards; operating risks; proprietary rights; infrastructure; future capital requirements; technical substitution; exchange rate fluctuations; insurance; foreign operations; tobacco industry considerations; weather conditions and natural disasters; control by management; seasonality; dividends; conflicts of interest; global financial conditions; and the implementation of the Labour Contract Law in the People's Republic of China in 2008. In addition to the foregoing risk factors, there are also risks related to doing business in China which include, but are not limited to: state ownership; government sector intervention; foreign investment; repatriation of profit and currency conversion; tax; shareholders' rights and enforcement of judgements; developing legal system; protection of intellectual property rights; permits and business licenses; appropriation; and availability of land. Should one or more of these factors materialize, or should our estimates or underlying assumptions prove incorrect, actual results, performance or achievements may vary materially from those described in forward-looking statements.
We caution that the foregoing list of important factors that may affect our future results, performance or achievements is not exhaustive. When reviewing our forward-looking statements, readers should carefully consider the foregoing factors and other uncertainties and potential events. Additional information about factors that may cause actual results to differ materially from expectations, and about material factors or assumptions applied in making forward-looking statements, may be found under the "Risk Factors" sections in our Annual Information Form and annual MD&A and elsewhere in our filings with Canadian securities regulatory authorities. Except as required by Canadian securities laws, we do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by us or on our behalf; such statements speak only as of the date made. We cannot assure readers that actual results, performance and achievements will be consistent with these forward-looking statements, and the differences may be material. The forward-looking statements included herein are expressly qualified in their entirety by this cautionary language.
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Contacts:
Migao Corporation
Jay Hussey
Vice President Corporate Finance
416-869-1108 ext. 104
Migao Corporation
Randall Smallbone
Chief Financial Officer
416-869-1108 ext. 103
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Datum: 15.11.2012 - 06:00 Uhr
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