China: Hanfeng 2Q 2011 results

Toronto headquarted Hanfeng, the largest producer of slow and controlled release fertilizers in China, reported that its sales for the quarter ended June 30, 2011 decreased to US$53.7 million from US$83.9 million for the same quarter of fiscal 2010. The decrease from the comparative period in 2010 is primarily attributable to the negative impact on production (resulting in lower sales volumes) from the Heilongjiang maintenance turnaround which began in the fourth quarter of fiscal 2011, as well as the permanent shut-down of the NPK prill tower at the Company’s Jiangsu facility in the second quarter of fiscal 2011, which were slightly offset by an 11 percent increase in the average selling price for Hanfeng’s slow and controlled release fertilizer and an 18 percent increase in the average selling price of its nitrogen enhancer (“NE”) product. EBITDA in the fourth quarter of fiscal 2011 was $4.7 million versus $11.8 million in the fourth quarter of fiscal 2010 due to lower sales revenue, as explained above, the costs of and lost production due to the Heilongjiang maintenance turnaround, as well as increased general and administrative expenses related to the new Indonesia joint venture which is currently in its ramp up phase and not yet operating at normal capacity. Net income in the fourth quarter of fiscal 2011 was $2.3 million as compared to $9.6 million during the same quarter in fiscal 2010.

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