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Reports Year-End Financial Results

posted on Jun 03, 2009 12:09PM

June 3, 2009

Migao Reports Year-End Financial Results

- 6-month stub period with change of year-end date -

TORONTO, ONTARIO--(Marketwire - June 3, 2009) - Migao Corporation (TSX:MGO), a China-based leading specialty potash fertilizer producer, today reported financial performance for the six-months ended March 31, 2009. Migao reported net income of $24.6 million or $0.56 per basic share from revenues of $161 million for the six-months ended March 31, 2009 as compared to net income of $27 million or $0.67 per basic share from revenues of $187 million for the twelve-month period ended September 30, 2008. On a comparative six-month performance basis, the Company reported net income of $7.7 million or $0.20 per basic share from revenues of $59 million for the six-month period ended March 31, 2008.

SUMMARY FINANCIAL STATEMENTS

                                                                  Year ended
                                6 months ended   6 months ended    September
                                March 31, 2009   March 31, 2008     30, 2008

($'000)
Sales                                  161,484           59,186      187,028
Gross Profit                            36,290           14,096       45,520
Net Income                              24,662            7,665       27,303
EBITDA                                  29,279            9,821       33,010
Basic EPS                                 0.56             0.20         0.67
Diluted EPS                               0.55             0.20         0.63

Weighted average number of
 shares (in millions of shares)
Basic                                     44.4             37.7         40.7
Diluted                                   44.7             40.4         43.1


Balance Sheet Highlights
($'000)
                        March 31, 2008   March 31, 2008   September 30, 2008

Current ratio                   5.40:1           2.84:1               3.32:1
Cash                            42,241           32,875               16,850
Working Capital                146,210           74,513               95,343
Total assets                   275,192          170,382              209,394
Debt to Equity Ratio            0.14:1           0.31:1               0.24:1

Migao changed its fiscal year end to March 31 to better align the Company's financial reporting, tax planning, and business cycles with customers and suppliers. As such, Migao is reporting its transitional fiscal 2009 financial results for the six-month period ending March 31, 2009. The first full fiscal period will be for the twelve months ended March 31, 2010.

Migao maintained gross profit margin at a desired and historically consistent 22.5%. EBITDA for the six-month period of fiscal 2009 was $29 million versus $33 million for the twelve months ended September 30, 2008.

"Our financial achievements in a challenging economic environment where many companies have experienced shrinking profit margins is evidence of Migao's dominant market position, strong customer base, and high quality products and service," said Mr. Liu Guocai, President and CEO of Migao.

The Company continues to reflect the costs of raw materials in its product pricing. Potash is the single largest raw material input cost for the Company and as such, the pricing of finished goods is influenced by the price of potash. Migao has successfully passed through historical raw material price increases to its customers, maintaining gross profit margin between 22-24% of revenue over the last five years. China is currently negotiating potash pricing with the world's dominant potash suppliers in Canada and Russia. Once the pricing has been set, which influences the price Migao pays for potash, the Company expects to adjust its product pricing accordingly.

For the three-month period ended March 31, 2009, Migao reported sales of $85 million compared to $35 million for the comparable period last year. EBITDA for the March 31st quarter of fiscal 2009 was $15 million or 18% of revenue as compared to $6 million or 17% of revenue for the same period last year. Net income was $13 million or $0.29 per basic share for the final quarter of fiscal 2009 compared to $5 million or $0.12 per basic share for the same period in 2008.

At March 31, 2009, Migao reported cash of $42 million and working capital of $146 million, including $66 million of potash in inventory and in transit. At September 30, 2008, long-term debt was nil and current bank debt was $21 million.

Conference Call

Migao will be hosting a conference call to discuss the year-end results at 10:00am Thursday June 4, 2009. The details are as follows:

Dial in number: 416-695-6320 or 1-866-852-2121

Taped replay (until June 11, 2009): 416-695-5800 or 1-800-408-3053

Taped replay access code: 1007374#

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 www.migaocorp.com for further information.

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