* Fiscal Q1 EPS C$0.15 vs C$0.17 a year earlier
* Fiscal Q1 sales rise more than 50 percent
* Gross profit margins seen stronger going forward
* Investors want details on Russian supply deal
* Controversy over deal has led to plunge in share price (Adds comments on supply deal from conference call)
By Euan Rocha and Allison Martell
TORONTO, Sept 8 (Reuters) - Migao Corp's MGO.TO profit fell as maintenance shutdowns cut sales of some of its most profitable products, the Chinese fertilizer company said on Thursday, as investors await details about a mysterious supply deal that sent its shares plunging earlier this year.
Even as the Toronto-listed company's earnings slipped, its sales improved as it shipped higher volumes of potassium chloride, or potash. Migao uses potash to produce higher-margin crop nutrients such as potassium nitrate and potassium sulfate.
Migao came under intense scrutiny this year after it signed a supply deal with an undisclosed Russian potash supplier and agreed to prepay US$100 million toward future shipments.
The timing of the supply deal was also inopportune, as a slew of accounting scandals this year tainted the images of many Chinese companies with North American listings. Against that backdrop, investors had immediate misgivings about Migao's prepayment and the mystery surrounding the supplier. [ID:nN0997357] [ID:nN1E76D0RB]
The company's share price has fallen nearly 60 percent this year, despite its announcement last month that its Russian supplier would refund the prepayment made toward the supply deal. [ID:nN1E77P0H7]
"The company has since renegotiated the refund of the prepayment, which we view as a big positive, but has yet to reveal any pricing or counterparty details," said Dundee Capital Markets analyst Richard Kelertas, in a research note on Wednesday.
"We suspect the investment community will be expecting some further details, as do we."
Speaking on a conference call Wednesday, a senior Migao executive said the refund was thanks to the "excellent relationship" between the two companies.
"We are an important customer to potash suppliers and (the supplier) feels supporting us with the refund and maintaining supply terms of our contract, we can grow our potash needs significantly and further the strength of our combined commercial relationship," said Jay Hussey, vice-president of corporate finance.
Hussey said Migao is hopeful the supplier could share more information about itself later this year.
Migao has defended the potash deal, saying it would cut costs at a time when prices for the coveted commodity are rising along with pressure on food supplies.
Net income in the first quarter ended June 30 slipped to C$7.8 million, or 15 Canadian cents a share, from C$8.8 million, or 17 Canadian cents a share, a year earlier.
Sales rose more than 50 percent to C$100.5 million.
Migao said on Thursday that the seasonal maintenance work conducted during the first quarter was successfully completed and it was ramping up to full production capacity.
"We have negotiated increased selling prices of our core fertilizers and are still enjoying strong pricing and demand for our specialty compound products," said Chief Executive Liu Guocai, in a statement.
Migao expects gross profit margins to revert to historical levels of between 22 percent and 24 percent, during the remainder of the year. Gross profit margins in most recent quarter were 17.1 percent. (Reporting by Euan Rocha; Editing by Frank McGurty)