Fertilizer producer Migao Corp. (TSE:MGO) swung to a fourth quarter net loss on an impairment charge tied to a sulphuric plant, though sales rose driven by speciality compounds.
Migao, established in 2003, produces specialty potash-based fertilizers for the high-value agricultural Chinese market.
The company is currently producing its two core products – potassium nitrate and potassium sulphate, at four operating sites in China.
The China-based company posted a net loss of $1 million, or two cents per diluted share, compared to $8.8 million, 17 cents per share profit, a year-ago.
Sales, for the quarter ended March 31, climbed to $138.8 million versus the $117.6 million in the same three month period in 2011.
Without the impact of a sulphuric acid plant impairment cost, earnings would have been five cents per diluted share, the company said.
Full-year earnings slipped to $16.53 million, or 31 cents per share, compared to a net income of $33.9 million, or 64 cents per share, a year-previously. Excluding one-time items, Migao would have earned 38 cents per share.
Revenues grew by 27 per cent to $402 million versus the $316.7 million.
"Our strong revenue growth for the year was driven by strong sales from our new specialty compound fertilizers as well as increased sales of potash," Migao chief executive Liu Guocai said in a statement.
Meanwhile, the company's potassium nitrate and specialty compound businesses were healthy during the year with "strong demand and healthy profit margins," Guocai said.
Gross margins, a measure of profitability, narrowed to 14.8 per cent from 22.3 per cent. Margins were hurt by lower selling prices for hydrochloric acid and a global economic downturn.
The company’s board also approved a cash quarterly dividend policy, which is expected to be declared August 2012.
Migao’s share price traded flat at $2.36 each on the Toronto Stock Exchange on Tuesday Morning.