Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Migao Corporation (TSX:MGO), a China-based leading specialty potash fertilizer producer, this week reported financial results for the year ended March 31, 2011. Migao reported net income of $34.5 million or $0.66 per basic share from record revenues of $317.0 million (RMB 2.1 billion) for the 12-months ended March 31, 2011 as compared to net income of $38.3 million or $0.80 per basic share from revenues of $269.1 million (RMB 1.7 billion) for the year ended March 31, 2010. EBITDA for the year was $34.5 million as compared to $38.3 million in the prior year.
“Despite very difficult conditions in the capital markets, Migao continued to deliver strong operational and financial results,” said Mr. Liu Guocai, Migao CEO. “I acknowledge the confusion and uncertainty caused due to the potash supply agreement announced in March. The Board and Management of Migao have analyzed an exhaustive list of potential remedies to assure fellow shareholders as to the legitimacy and benefit of the potash agreement. The agreement is very important to the company in terms of security of supply and economic benefit. We will continue to honor a non-disclosure agreement, which prohibits us from disclosing the share structure and resources of our potash supplier. For competitive reasons we are not yet willing to disclose the exact discount pricing built into the contract. As such, and to show my confidence in the agreement, I have pledged my entire shareholdings of Migao against the possibility of default by our supplier. This represents approximately one third of the total outstanding shares of Migao.”
Read the full news release here
