Iofina PLC (LON:IOF) returned to “more normalised” levels of production in the latter part of last month following lower than expected output in November and early December.
The company, which derives iodine from brine water extracted from oil and gas wells in Oklahoma, was affected by an increase in fracking operations by its partners.
The update came as the company reported it produced just short of 219 metric tonnes of the material in the second half of the year and 474.2 tonnes for the year. It expects output for the first six months of 2017 to be in the range of 235-255 tonnes.
At the same time, the company’s chemical trading operation “traded successfully” throughout the year, with “solid demand” for its crystalline IOflo iodine and its halogen-based derivatives.
Increased sales despite weak iodine prices
Iofina’s chief executive Tom Becker said he is impressed that the company is on track to beat its sales figures from last year despite having to overcome several hurdles, including those challenges mentioned above.
“Overall [in 2016] I think we’ve done a good job of overcoming the challenges that have been put to us,” Becker told Proactive.
“Sales have been pretty strong and demand for iodine and iodine-based derivatives have been as we predicted – fairly robust.”
One of the main problems for Iofina in 2016 was the weaker-than-expected iodine price, which shed around 20% over the course of the year.
“Iodine prices are still lower than historical averages. We don’t like the iodine price that low but we can’t control that, we can only control what we can control,” he said.
“Any kind of increase in the iodine price is going to benefit us tremendously but we can’t count on that and we need to be able to be a good business wherever iodine prices are.”
Regardless, Becker is confident that Iofina can continue to make good progress in 2017 even if the iodine price doesn’t strengthen or actually falls slightly.
“Yeah we can make [lower prices] work. We keep improving our efficiencies all the time and any kind of expansion we do would actually lower our costs of production.”
Talking of expansion, the company has a lot of plans in the pipeline for the coming 12 months.
“In 2017 we’re looking at increasing products at Iofina Chemical and we’re looking at new products on the resource side to try and increase our iodine output this year as well.”
--Updates for CEO comment--