Migao Corporation, a China-based specialty potash fertilizer producer, reported financial results for the three and twelve month periods ended March 31, 2015.
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Migao reported revenues of $444.5 million for the year ended March 31, 2015, representing $75.2 million (20%) increase from $369.3 million for the year ended March 31, 2014.
The revenue increase for the year is mainly due to increased sales of potassium sulphate, potassium nitrate and potassium chloride (direct sales) primarily as a result of higher sales volumes for these products, coupled with higher average selling price for potassium sulphate achieved during the year ended March 31, 2015, compared with one year ago. Market conditions for potassium sulphate were strong throughout the fiscal year 2015.
The above sales increases were partly offset by aggregate decreases of approximately $51 million in the sales of compound fertilizers, ammonium chloride as well as direct sales of compound fertilizers. No direct sales of compound fertilizers occurred in the year ended March 31, 2015.
The sales decrease in compound fertilizers and ammonium chloride were mainly caused by significant decreases in sales volume as well as lower average selling prices for these products during 2015 fiscal year as compared with fiscal 2014. PRC market demands for potassium nitrate, compound fertilizers and ammonium chloride remained weak throughout the year ended March 31, 2015.
The effect of increased sales volume of hydrochloric acid was offset by the decline in the average selling prices as the market demands were limited by the slow-down of the Chinese economy. The appreciation of Chinese Yuan (RMB) against Canadian dollar also contributed to the higher dollar sales reported for the year ended March 31, 2015.
The fluctuation in the exchange rate between RMB and Canadian dollar also impacts Migao's other financial numbers reported in Canadian dollars during the quarter and the year ended March 31, 2015. ■