Iofina PLC (LON:IOF) said it remains on track to deliver record iodine output for the year after its plants processed 167.2 metric tonnes of the crystalline product in the third quarter.
In an update, it said expects to exceed guidance for the second half, which was set at 305-325 tonnes.
It has four IOsorb operations in Oklahoma, which extract the element from brine water pumped to surface during oil production.
In the nine-months to date output was 454 metric tonnes. Iofina said the spot price averaged US$32 per kilogram in the three months ended September 30. Chemical sales were “robust” and in line with expectations, it added.
"The company remains on track to achieve a record year of crystalline iodine production,” said chief executive Tom Becker.
“Product sales are in line with our targets and we are further benefiting from the rising iodine spot price. Importantly, we are continuing to execute on our stated strategy of increasing production capacity.”
In the same announcement, Iofina said its new specialty chemical division, IofinaEX, “continued to progress”.
The unit specialises in hemp-derived products such as cannabidiol, or CBD, and “continues to refine its process development work and develop its business plans in the US and abroad”, the firm added.
Broker upbeat
The shares, which have more than doubled in value in the year to date, were up 4% at 25.18p just after midday.
Specialist small-cap broker finnCap reckons the stock is worth 35p. Analyst Jonathan Wright said the production trajectory and pricing environment of iodine should “drive” record revenues and earnings this year.
He said investors may have been hoping for a more detailed update on the nascent CBD operation.
Wright added: “The shares have pulled back almost 20% in the past month on the back of profit-taking and difficult equity markets.
“We believe this offers an excellent buying opportunity for a stock that is delivering on its growth strategy into a rising iodine market and has attractive optionality around expansion into the high growth/margin CBD market.”