Firstly, I'm pleased to report an improvement in our results from the first quarter. We sold 1.7 million tons of methanol, representing a 12% increase over the last quarter, and our highest volume of quarterly sells since the second quarter of 2007. This increase (inaudible) and anticipation of increased production volumes in Egypt and Chile. In the first half of 2010, we are managing our supply balances by increasing purchases of methanol, but expect that the next two years will become less dependent on purchases and supply more sells with produced product.During the first quarter, we achieved an average realized price of $305 per ton, which is $23 per ton higher than last quarter. And this led to higher EBITDA of $81.5 million and net income of $29 million or $0.31 per share. There were a couple of factors that caused that earnings to be lower than normal and lower than the consensus forecast of $0.42. Firstly, our stock-based compensation was about $0.08 per share higher than it would have been in a quarter in which our share price did not increase. We also have higher (inaudible) compensation in the first quarter each year due to accounting rules. Secondly, one of the factors that are difficult for analysts to estimate is the level of sales from produced methanol. We make a significant margin on produced methanol that at a much more modest measure than purchased methanol. So it's small changes in sells of produced methanol can have a substantial impact on our results. So despite achieving higher production in the first quarter, the benefit of this is not yet being reflected in our earnings as our sells of produced methanol were a little over net production in Q1. If sells were the same as production in Q1, this would have improved earnings by a further $0.05 per share.
I'll comment more on industry and pricing outlook a little later in the call. But first, I'd like to provide you an update on our operations. Our plant in New Zealand, the Motunui plant, continued to operate well and produced 208,000 tons of methanol. I'll comment more on the outlook for these operations and natural gas in that country in just a few moments.In Trinidad, we produced 455,000 tons of methanol, which is a little below capacity for those plants as some cyclical issues led to a short period of unplanned downtime at our Trinidad site during the first quarter. These issues were resolved in late March. And the site has been operating well since that time. However, we are planning a short outage at (inaudible) plant next week to conduct another minor repair. In Chile, we operated the site at about one-third capacity, and produced 304,000 tons of methanol. This represented our base quarter production in Chile in two years as we benefited from increased gas supply from the successful new gas development initiatives that are taking place in southern Chile. And again, I'll comment more on the outlook for natural gas and our plants in Chile in just a few moments. I'll switch topic now and address the industry and pricing outlook. As I mentioned in our last conference call, methanol demand has recovered significantly over the past year. And current annualized demand has now surpassed pre-recession levels. We are continuing to see improved demand in both chemical and energy derivatives in all regions. And current indications are that demand will improve further over the coming quarters. The strong energy price environment continues to underpin healthy demand for methanol in both fuel-blending and DME in China. Demand growth into these derivatives has been very strong in recent years. And the outlook for both – the outlook for further growth is excellent.
China has recently introduced an M85 or 85% methanol national standards for blending methanol with gasoline, which took effect on the 1st of December, 2009. And we expect an M15 or 15% methanol national standard to be introduced later this year. Provincial programs in China will also continue to support more methanol fuel-blending. For example, we understand that Xanji [ph] province, which has been blending methanol into gasoline for more than 20 years is planning to introduce an M30 or 30% blending standard later this year. Also, the oil majors, such as Sunnytech [ph] have begun retailing M15 fuels in Xanji. And we understand that by the end of this year, all retail stations in this province will be offering methanol blends.Read the rest of this transcript for free on seekingalpha.com