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Iofina confident of progress in debt negotiations

Snapshot

  • North America’s second-largest iodine producer

  • Record production volumes produced

  • Has diversified into CBD

Iofina PLC -

Quick facts: Iofina PLC

Price: 16.55 GBX

LSE:IOF
Market: LSE
Market Cap: £31.75 m
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We achieved record iodine production whilst also executing on our expansion at the right time when iodine prices are continuing to build momentum

CEO Tom Becker 

 

What does the company do?

Put simply, Iofina PLC (LON:IOF) extracts iodine from brine water, a byproduct of onshore oil and gas production in the US.

The company is the second-largest producer of iodine in North America and comprises three entities: Iofina Resources, Iofina Chemical and IofinaEX.

The AIM-listed group‘s strategy is to identify, develop, build, own and operate iodine extraction plants based on its well-head extraction technology.

IofinaEX has been set up to produce cannabidiol (CBD), the non-psychoactive ingredient of cannabis.

How’s Iofina performing?

In a January update, the group said iodine production in 2019 had totalled 602.7 tonnes, up from 588.8 tonnes the year before, with 286.7 tonnes produced in the first half of the year and 316 tonnes produced in the second.

Production in the first quarter of the current year 2020 was 129.7 tonnes, more or less in line with the 134.4 tonnes produced in the same quarter of 2019.

Iodine prices rose more than 20% in 2019 while the spot price was generally in the mid-US$30s per kilogram as a result of continuing demand and tightness in supply that is predicted to lead to further price increases.

The group also said it remains confident in the potential of IofinaEX, the new speciality chemical operation focused on the extraction of valuable products such as cannabidiol (CBD), cannabinol and cannabigerol from hemp.

In 2019, the chemicals group reported revenues up 22% to US$29.2mln while there was a pre-tax profit of US$600,000 compared to a loss of US$1.1mln.

Net debt also fell to US$18.2mln from US$25.6mln. Chief executive Tom Becker said the 2019 performance had left it in a "stronger position than ever from which to resolve its current debt situation".

What the CEO says, Tom Becker

"IO#8 was completed on time and within budget and is now currently idle.  However, we anticipate that IO#8 will be back online in H2 2020m,” Becker said in the results statement.

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Inflexion points

  • Iodine prices stable
  • The CBD business - although broker finnCap cautions it is “still early days” for the new division.
  • “Iofina continues to refine its process development work and mature its CBD strategy for both the US and international markets,” said analyst Jonathan Wright.

 

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Iofina PLC reveals 'record breaking year' in 2019 trading update

Iofina PLC (LON:IOF) CEO Tom Becker tells Proactive it has moved into a profit in 2019 after record iodine production for a second year running. Becker says the chemicals group reported revenues that rose by 22% to more than $29 million, while there was a pre-tax profit of $600,000 compared...

4 days, 21 hours ago

2 min read