TORONTO, ONTARIO--(Marketwire - Feb. 14, 2012) -Migao Corporation (TSX:MGO), a China-based leading specialty potash fertilizer producer, today reported financial results for the three and nine-month periods ended December 31, 2011.

For the third quarter ended December 31, 2011 Migao reported revenues of $97.4 million as compared to revenues of $64.6 million for the three-month period ended December 31, 2011. For the quarter, the Company reported net income of $3.8 million or $0.07 per basic share as compared to net income of $8.2 million or $0.16 per basic share for the same period one year ago. The increase in revenue for the quarter ended December 31, 2011 is mainly due to higher selling prices of potassium sulphate, potassium nitrate, and potassium chloride, as well as higher sales volumes of potassium sulphate, potassium nitrate, potassium chloride, and specialty compound fertilizers. The decrease in net earnings is due to increasing potash cost per tonne, higher direct sales of lower margin potassium chloride, as well as lower average selling price of hydrochloric acid. Net earnings were also impacted by start-up costs related to new project facilities.

"Global economic pressures remained a challenge to our bottom line, however we are encouraged by strong selling prices of our core fertilizer products," said Mr. Liu Guocai, CEO of Migao. "We remain committed to leveraging our strong reputation throughout China to grow our operations and provide the highest quality agriculture products."

For the nine months ended December 31, 2011 Migao reported revenues of $263.9 million as compared to revenues of $199.3 million for the nine-month period ended December 31, 2010. For the first three quarters of fiscal 2012, the Company reported net income of $17.6 million or $0.33 per basic share as compared to net income of $25.1 million or $0.48 per basic share for the same period one year ago.

Migao's gross profit margin decreased to 16.1% for the quarter from the previous quarter's gross margin of 21.4%. Gross margin for the quarter was negatively impacted primarily from ongoing depressed selling price for the hydrochloric acid, a high-volume co-product from the potassium sulphate production process. Similarly impacting gross margin was depressed selling prices of ammonium chloride, the co-product from the potassium nitrate production process. Gross margin for the Company's specialty compound fertilizers was within target at 17.3%. Selling prices for hydrochloric acid are impacted by global economic conditions, specifically related to the export of finished goods that consume hydrochloric acid as a raw material. Ammonium chloride pricing has improved subsequent to the end of the quarter are expected to remain at normal levels for the balance of the current quarter, improving overall gross margin.

Currently, Migao's production capacity is 480,000 tonnes annually of combined core products and specialty compound fertilizers. Announced projects under construction will bring online an additional 40,000 tonnes of potassium sulphate capacity during the current quarter as well as 100,000 tonnes per year of specialty compound fertilizers during calendar 2012. The Shanghai Migao facility is complete with all production units successfully completing their test phases. The facility is currently awaiting final approvals to commence full-scale operations. Final approvals are expected before the end of the current quarter with ramp to full production to occur in the first quarter of fiscal 2013.

During the quarter, the Company sold 31,033 tonnes of potassium nitrate, 62,760 tonnes of potassium sulphate, 30,262 tonnes of compound fertilizer, 5,656 tonnes of potassium chloride, and at the end of the period, the Company had $9.7 million (37,870 tonnes) of finished goods on hand, including co-products. At the end of the quarter, the Company had $99.7 million (194,260 tonnes) of potassium chloride inventory with an average delivered price of $513 per tonne.

At December 31, 2011, Migao reported cash of $9.7 million and working capital of $206.2 million. During the quarter, Migao received the final refunds from Potash Export Company totaling approximately $70 million ahead of the scheduled due date of December 31, 2011. The total amount refunded was $100 million, with approximately $30 million refunded during the second quarter.

Conference Call

Migao will be hosting a conference call to discuss the year-end results at 2:00pm, Eastern Time, Tuesday February 14, 2012. The details are as follows:

Dial in number: 416-340-2218 or 1-866-226-1793

Taped replay (until February 28, 2011): 905-694-9451 or 1-800-408-3053

Taped replay access code: 2855501#

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.

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.

To be added to Migao's email distribution list for news releases or to be removed from the list, please send a request to [ info@migaocorp.com ].

Contributing Sources

---

Market Wire