TORONTO, ONTARIO--(Marketwire - July 3, 2012) -Migao Corporation (TSX:MGO), a China-based leading specialty potash fertilizer producer, today reported financial results for the year ended March 31, 2012. Migao reported net income of $16.5 million or $0.31 per basic share from revenues of $402.7 million (RMB 2.6 billion) for the 12-months ended March 31, 2012 as compared to net income of $33.9 million or $0.65 per basic share from revenues of $317.0 million (RMB 2.1 billion) for the year ended March 31, 2011.

Net earnings were negatively impacted by the recognition of an impairment of $4.6 million for assets used in the production of sulphuric acid. Without the impact of the impairment expense, earnings for the year ended March 31, 2012 would have been $20.0 million or $0.38 per basic share.

"Our strong revenue growth for the year, a record for the Company, was driven by strong sales from our new specialty compound fertilizers as well as increased sales of potash," said Mr. Liu Guocai, Migao CEO. "Our profit margin for the year was impacted by lower average selling prices of the co-product hydrochloric acid, a result of the global economic downturn reducing demand for products utilizing hydrochloric acid in their production. Further impacting our results was reduced production of potassium sulphate ('SOP') as a result of the restrictive environment for hydrochloric acid ('HCL'). Our potassium nitrate and specialty compound businesses were healthy throughout the year with strong demand and healthy profit margins."

Migao also announced today the Board of Directors has approved a quarterly cash dividend policy. The initial dividend is anticipated to be declared in August 2012 with the payment date expected to be made in September 2012. The annual cash dividend is expected to equal approximately $0.06 per share, representing a dividend yield of approximately 2.4% based on the recent closing price of the Company's shares. Any decision to declare and pay dividends will be subject to the approval of the Board of Directors of Migao Corporation, in its sole and absolute discretion, upon considering the Company's earnings, financial and operational requirements and such other factors as it deems advisable.

"We have reacted quickly to the issues related to HCL. To make up for the decline in SOP and HCL sales, we have increased our production capacity of specialty compound fertilizers ahead of schedule," continued Mr. Liu Guocai. "We are working with international experts to determine alternative applications, markets, and formulations to mitigate Migao's current HCL situation."

Gross profit for the year was 14.8%, a decrease from 22.4% reported last year. The decline in gross margin is primarily a result of the ongoing HCL market conditions. HCL demand and pricing have declined as a result of European and North American weakness for products that use HCL in their manufacturing process. The average selling price for HCL in China is regional and has declined 40-75% depending on the region as compared to average selling prices in 2010 and 2011.

Subsequent to the end of the year, Shanghai Migao received its final permits to commence production and is currently fulfilling an order for a fruit and vegetable customer. Ramp up to full production will be dictated by market conditions for SOP and HCL. Local pricing for HCL is strong however volume demand is below what would be produced by Shanghai Migao at full production capacity. Discussions with potential tobacco customers and other HCL customers are ongoing.

During the year Changchun Migao completed construction of an additional 40,000 tonne per year capacity of potassium sulphate. Construction at Zunyi Migao for a 100,000 tonne specialty compounding facility was also completed and ramped up to full production capacity. From the additions at Changchun, Zunyi and Shanghai Migao receiving full and final permitting, Migao's production capacity of potassium nitrate, potassium sulphate and specialty compound fertilizers is 620,000 tonnes per year.

For the three-month period ended March 31, 2012, Migao reported record sales of $138.8 million compared to $117.6 million in the same three-month period in 2011. Net loss was $1.0 million or $0.02 per basic share for the final quarter of fiscal 2012 compared to $8.8 million or $0.17 per basic share for the fourth quarter of fiscal 2011. Without the impact of the sulphuric acid plant impairment expense, earnings for the quarter ended March 31, 2012 would have been $2.4 million or $0.05 per basic share.

At the end of the period, the Company had $38.9 million (77,974 tonnes) of potassium chloride inventory with an average delivered price of $498 per tonne, of which 45,930 tonnes were on hand and the remainder in transit. In addition, during the year, the Company sold 111,552 tonnes of potassium nitrate, 208,437 tonnes of potassium sulphate, 148,248 tonnes of compound fertilizer, 147,692 tonnes of potassium chloride and at the end of the period, the Company had $15.6 million (88,716 tonnes) of finished goods inventory on hand, including co-products.

At March 31, 2012, Migao reported cash and restricted cash of $68.9 million and working capital of $205.5 million. At March 31, 2012, current bank debt was $67.0 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 [ 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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