November 12, 2010 / 12:36 PM / in 7 years

UPDATE 1-Migao Q2 profit falls on higher costs, tax rate

* Q2 EPS C$0.16 vs C$0.20 last year

* Rev rises 1 pct

Nov 12 (Reuters) - Specialty fertilizer maker Migao Corp MGO.TO posted lower quarterly results, hurt by increased selling, general and administrative costs, and a higher effective tax rate, but said revenue will pick up in the third quarter.

“The current quarter will see revenue pickup from our specialty compound fertilizer product as well as from expected increased selling prices from our core fertilizers,” Chief Executive Liu Guocai said in a statement.

“The second half of the year is looking very promising with selling prices and revenue improving from seasonal demand improvements, global fertilizer prices moving up, and increased production.”

For the second quarter, net income fell to C$8.3 million, or 16 Canadian cents a share, from C$9.6 million, or 20 Canadian cents a share, last year.

Sales rose to C$68.5 million from C$67.7 million.

Migao produces 420,000 tons annually of combined core products and specialty compound fertilizers. Announced projects will bring online an additional 100,000 tons of core product capacity by the end of 2011.

The company’s shares, which have gained 6 percent in value since it reported first-quarter results in August, closed at C$7.15 on Thursday on the Toronto Stock Exchange. (Reporting by Isheeta Sanghi in Bangalore; Editing by Don Sebastian)

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