Rio Tinto will report IOC's JunQ sales and production results on
Tuesday 17 July. LIF-UN.TO will republish the same figures on 8
August, along with the more detailed accounts.
Our recent trade data review for the JunQ sees us trim volume
expectations for the quarter to 3.6mt sales and 3.2mt production.
The difference between sales and production represents the
depletion of an inventory which had been accumulated during a
shipping-disrupted MarQ. Based on our revised volume expectations,
we are looking for earnings of C$0.63/sh (rel consensus of C$0.71)
- the difference between our numbers and the street being almost
entirely explained at the revenue line. Please see 'North American
Iron Ore Review #6' for more detail on our production expectations,
and full report for more detail on LIF_U.TO earnings expectations.
We are revising our 2012/2013/2014 EPS estimates to
C$2.68/C$3.46/C$2.74 (from C$2.54/C$3.54/C$2.85) respectively.
LIF's minority interest (
) is currently ramping up the 22mtpa expansion project, and we
understand that commissioning efforts may have compromised
underlying production in the JunQ. This commissioning process
should now be near completion, and for 2H 2012 we should see the
results of the nameplate capacity increase. 2013 is about the
23.3mtpa expansion, but we understand that RIO has delayed its
approval of the 26mtpa expansion until late 2013 or even early
No change to C$40/sh target price or outperform rating.
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