CLSA NNT pre-tax profit of US$407m in 1Q10, jumped by six folds

Newmont Nusa Tenggara (NNT) posted pre-tax profit of US$407m in 1Q10, jumped by six folds from a year before. Bumi currently owns 75% in the JV that controls 24% stakes in NNT. Pls see comment from our analyst Olie.

Newmont Nusa Tenggara (NNT) posted pre-tax profit of US$407m in 1Q10, jumped by six folds from a year before.

Annualizing 1Q10 result, NNT could post US$1.6bn in pre-tax profit in FY10 as compared to our current forecast of US$1.15bn in FY10.

We are currently assuming NNT to contribute around US$145m or 39% of total consolidated Bumi earnings in FY10.

Should NNT book US$1.6bn in pre-tax profit, hence around US$1.1bn in net profit, NNT could contribute between US$200m to US$270m to Bumi consolidated net profit, translating to 15% to 33% potential earnings upside.

We still think the main driver for BUMI will be politics. BUMI seems set to make a reappearance on the podium as its risk-reward profile is getting more favorable as the current political wind is blowing in its favor again.