IGO’s 2QFY25 result was weak with lower shipments and realised pricing at Greenbushes and ongoing weakness at Kwinana, combined with unrealised FX losses driving IGO’s share of earnings from the TLEA JV to a material net loss. This pushed underlying Ebitda for IGO to negative A$79m, a result compounded by a weaker performance at Nova. An impairment of the carrying value of the Kwinana Hydroxide refinery is expected to be taken with the 1HFY25 earnings result and we have included a A$300m impairment in our forecast. A recovery in production volumes at Greenbushes, and more importantly spodumene prices, remains the key driver behind our positive view on the stock. The build in spodumene inventory should also provide a boost to earnings should spodumene prices continue to rise. We are reiterating our BUY rating, lifting our price target 6% to A$6.70.
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