TORONTO - Migao Corp. (TSX:MGO) says its plans to implement a quarterly cash dividend later this year as the Chinese fertilizer company reported a narrowing of its fourth-quarter net loss.
The initial dividend, expected to be in the neighbourhood of six cents per share for a yield of about 2.4 per cent, is expected to be declared in August with a payment date expected in September, the company said Tuesday.
Migao said its net loss in the three months ended March 31 was $1 million or two cents per share, compared with a net loss of $8.8 million or 17 cents per share in the same 2011 period.
Sales revenue rose to $138.8 million from $117.6 million.
For the full year, Migao reported net earnings of $16.5 million or 31 cents diluted per share on revenue of $402.7 million, compared with net income of $33.9 million or 64 cents per diluted share in fiscal 2011 on revenue of $316.9 million.
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 would have been $20 million or 38 cents per basic share.
For the fourth quarter, earnings without the sulphuric acid impairment charge would have swung from a loss to a profit of $2.4 million or five cents per basic share, Migao said.
"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," CEO Liu Guocai said.
"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."
Also affecting results was reduced production of potassium sulphate as a result of a restrictive environment for hydrochloric acid.
Meanwhile, the company's potassium nitrate and specialty compound businesses was healthy throughout the year with "strong demand and healthy profit margins," Guocai said.