|By Marketwired .||
|August 15, 2013 07:30 AM EDT||
TORONTO, ONTARIO -- (Marketwired) -- 08/15/13 -- Migao Corporation (TSX:MGO), a China-based specialty potash fertilizer producer, today reported financial results for the three-month period ended June 30, 2013.
Migao reported revenue of $29.4 million for the first quarter ended June 30, 2013 as compared to revenue of $32.5 million for the same period ended June 30, 2012. Net loss for the quarter was $5.1 million or ($0.10) per basic share as compared to net loss of $3.9 million or ($0.07) per basic share. The decline in revenue as compared to the first quarter a year ago, is primarily a result of significantly lower sales of potassium chloride, as well as lower average selling price of potassium nitrate. Offsetting those declines were increased revenue from potassium sulphate as well as increased volume and average selling price of hydrochloric acid.
The decrease in net income was primarily a result of lower gross profit margin related to the decreased average selling price of potassium nitrate.
SUMMARY FINANCIAL STATEMENTS 3 months ended 3 months ended June 30, 2013 June 30, 2012 ($'000) Sales 29,405 32,535 Gross Profit 1,987 2,821 Gross Profit (% of revenue) 6.8% 8.7% Net Income (5,128) (3,919) EBITDA (1,460) (652) Basic EPS (0.10) (0.07) Weighted average number of shares (in millions of shares) Basic 52.5 52.5 Diluted 52.5 52.5 Balance Sheet Highlights ($'000) June 30, 2013 March 31, 2013 Current Ratio 1.75:1 1.80:1 Cash, equivalents & restricted cash 101,542 77,040 Working Capital 184,239 183,037 Total Assets 561,940 542,804 Total Liabilities 239,258 234,363 Total Equity 322,682 308,441 Non-Current Bank Debt to Equity Ratio 0.02:1 0.02:1
"Recognizing that our priority continues to be returning the Company to profitability, we are encouraged by the upward trend in hydrochloric acid pricing and demand, a chronic challenge that has impacted our performance for several quarters," said Mr. Liu Guocai, CEO of Migao. "We expect the recent pricing and demand to continue and not slide to levels seen earlier. Our efforts to attract new customers in new regions as well as increase our offerings to existing customers will be instrumental in getting us back to profitability."
Migao's gross profit margin was 6.8% of revenue, compared to 8.7% in the same period a year ago. The decrease is a result of reduced selling prices of potassium nitrate.
The Company recently announced its intention to form a joint venture with EuroChem, Russia's largest mineral fertilizer producer and a top-ten agrochemical company globally, to produce potassium nitrate and low-chloride NPK fertilizers in Yunnan province. Once the joint venture agreement is finalized, Migao will provide further details regarding the budget, scale, and schedule of the project.
At the end of the period, the Company had $30.4 million (63,475 tonnes) of potassium chloride inventory with an average delivered price of $479 per tonne. In addition, during the quarter, the Company sold 16,962 tonnes of potassium nitrate, 21,939 tonnes of potassium sulphate, 4,853 tonnes of compound fertilizer, 2,307 tonnes of potassium chloride, and at the end of the period, the Company had $43.9 million (112,190 tonnes) of finished goods inventory on hand, including co-products.
At June 30, 2013, Migao reported cash and restricted cash of $101.5 million and working capital of $184.2 million.
The Company also announces the resignation of Dr. Mark Stauffer from the Board of Directors. Dr. Stauffer served as a Director since Migao went public in 2006 and was a member of the Audit and Technical Committees. "I wish Mark all the best and thank him for his efforts and many contributions over the years," said Mr. Guocai.
Migao will be hosting a conference call to discuss the first quarter financial results at 10:00am, Eastern Time, Thursday August 15, 2013. The details are as follows: Dial in number: 416-340-8410 or 866-225-2055 Taped replay (until August 29, 2013): 905-694-9451 or 1-800-408-3053 Taped replay access code: 4181545#
Annual Meeting of Shareholders
The Company invites all shareholders to the annual and special meeting of Migao Corporation to be held at 885 West Georgia Street, Suite 1500 Vancouver, British Columbia on September 24, 2012 at 10:00 a.m. (Vancouver time).
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, potassium sulphate, and specialty compound fertilizers) to China's agricultural market. Migao Corporation is subject to, and complies with strict government regulations that govern safety, quality and environmental protection. Please visit www.migaocorp.com 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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