· The company reported net profit of US$67m in 1Q10, down by 34% YoY and 4% QoQ. The result came in as expected, representing some 21% of our full year estimate.
· ASP, as expected, was weak YoY and flat QoQ, as selling price reflected carry over contracts from last year. We expect stronger prices in the coming quarters as new contracts start kicking in. We are currently assuming US$69.5/t ASP for FY10 and think that price could hover around US$72/t should current spot stay.
· Production looks strong at 6.0m tonnes, up by 36% YoY, reflecting some 27% of our full year forecast. Production growth was largely driven by opening up of Indominco East and Kitadin mine since 2Q09 and strong outputs from Trubaindo. There is some upside to our current forecast of 22m tonnes production, depending on the company’s ability to secure forestry permit extension for Jorong on schedule.
· We are still reviewing our earnings estimates, and see some 5% potential earnings upside. At this juncture, we retain our Buy rating on ITM.
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