Iofina PLC (LON:IOF) delivered a “record year” in 2018 on the back of increased iodine production at its IOsorb plants in Oklahoma.
The iodine and chemicals manufacturer reported record earnings (EBITDA) for the year ended 31 December 2018 of US$2.6mln, 89% higher than the prior year, while revenues climbed 15% to US$24mln.
WATCH: Iofina highlights record production and earnings for 2018as iodine prices strength
Pre-tax losses, meanwhile, had narrowed by 85% to US$1.4mln. The group also ended the year with a cash balance of US$4.5mln, up 32% year-on-year.
The company said it had produced its highest ever amount of crystalline iodine, which rang in at 588.8 metric tonnes (MT) compared to 503 MT in 2017.
Iofina had continued to break records in its current year, reporting its best ever first quarter iodine production of 134.4 MT in mid-April.
Plans for an eighth production site were also under way, with construction expected to begin later this year.
Dr Tom Becker, Iofina’s president and chief executive, added that prices in the iodine market had continued to “move in a positive direction”, with more growth expected throughout the rest of the year.
“Over the last few years, by executing cost savings plans, prudent growth, and investing in new products, the group has turned itself around and is performing at its highest level to date.”
Iodine, which Iofina extracts from brine produced by onshore oil wells, is an element that has a wide range of uses including as a disinfectant and as a dye pigment.
“More of the same please”, says broker
In a note to clients, analysts at Iofina’s ‘house’ broker finnCap said the company’s “laser focus” on costs and efficiency improvements “should continue to pay dividends”, with the projected increase in iodine prices likely to amplify the benefits.
The broker added that Iofina’s recently established cannabinoid division, IofinaEX, was “a natural fit” as its current iodine production used many of the same processes required to extract the cannabis-derived chemicals.
“Iofina also has operations in Montana, Colorado and Kentucky, the top three regions for hemp production in the US. Diversification into synergistic, high-growth new areas can be no bad thing as long as it doesn’t distract from the progress being made in its core Resource and Chemical divisions”.
finnCap has Iofina pegged with a 34p target price.
In afternoon trading, shares were down 2.1% to 16.15p on Wednesday.
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