Iofina reports 'strong' sales despite lower production

The AIM-traded firm said spot iodine prices had moved “slightly higher” to between $35 and $37 per kilogram, providing further increases in revenue.

First half production totalled 249.4 million tonnes of crystalline iodine, in line with the revised forecast of 250 million tonnes.

Iofina said its expansion plans were progressing “well”, with IO9 construction expected to begin by the end of the year.

For the second half, the company said it was expecting iodine production of between 260 million and 275 million tonnes, with operational changes at a brine partner's sites affecting supply levels to two of its plants in the current year.

Despite that, the board said it believed Iofina was currently on track to achieve full-year revenue and profit targets.

The company said it was working to increase brine supply and, given the recovery in the oil market, was anticipating some reinvestment in oilfields by its partners, which would boost brine output.

It was also progressing with its expansion plans for IO9 to further offset any reduced supply.

“The iodine market is seeing an excellent recovery in line with the rapidly accelerating global economic recovery as we begin to emerge from the challenging Covid-19 period,” said president and chief executive officer Dr Tom Becker.

“Demand is strong and prices are back at pre-pandemic levels of around $35 to $37 per kilogram, supporting higher revenue expectations.

“We are also seeing excellent recovery in the oil markets with prices up to around $75 per barrel, which we are hopeful will result in increased reinvestment by our partners into their oil fields.”

Dr Becker said he was also pleased with the progress being made towards IO9, which would reduce any risk from reduced brine supply seen by any of the company’s plants, and ensure it was “well-positioned” to meet rising demand for iodine and its derivative products.

“In spite of lower production, we are fulfilling demand with our capacity and we remain on track to meet full-year expectations.

“The company continues to meet its debt obligations and is in an excellent position to continue with our prudent growth strategy.”

At 1023 BST, shares in Iofina were down 5.88% at 14p.