Iofina achieves record revenues and earnings despite challenging global trading environment

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Shares in Iofina PLC (LON:IOF) surged on the back of interims that revealed record revenue and underlying earnings (EBITDA) for the iodine extractor.

Revenue in the six months to the end of June rose 8% to US$15.74mln from US$14.53mln in the corresponding period of 2019 while EBITDA jumped 50% to US$2.95mln from US$1.97mln.

Profit before tax was US$1.32mln, compared to a loss in the first half of last year of US$300,360.

The company ended June with cash balances of US$5.51mln, compared to a cash balance of US$10.26mln a year earlier.

The group’s iodine production plants produced a total of 284.4 tonnes of crystalline iodine in the period, in line with the production of 286.7 tonnes in the first half of last year.

Iofina also completed its IOsorb plant, IO#8, on budget; the plant is now fully operational.

The iodine market was robust before the coronavirus (COVID-19) pandemic and remained fairly strong throughout the second quarter, Iofina observed.

Demand for iodine and iodine-based products has seemingly slowed slightly in the third quarter and, as a result, large volume iodine prices have fallen marginally from US$35-37/kg early in the quarter to US$33-35/kg currently.

Iofina said it is difficult to predict the outlook of iodine demand and prices, which will likely be driven by the speed of the global economic recovery.

Before the pandemic, Iofina had dipped its toe in the hemp-derived products with the formation of a subsidiary, IofinaEX Global Inc; in its interim results statement, the company said there are no plans to invest further in IofinaEX given the regulatory uncertainty and low pricing environment for hemp-based products in the USA.

The group is looking, however, at new applications of its Iosorb technology, the expansion of existing halogen-based derivatives and the development of new products.

“Despite a challenging global trading environment caused by COVID-19 we continued to execute our strategy effectively, reflected in the financial highlights and in our levels of iodine produced. The record revenues and EBITDA achieved by the group is a result of business strategies implemented over the last few years and the efficiency of our IOsorb plants,” declared Tom Becker, the president and chief executive officer of Iofina.

“Despite the economic uncertainty, Iofina is a highly efficient, low-cost operator, so we are still delivering good margins on our Iodine sales. The completion of our debt restructuring also means that we have a much stronger balance sheet and eliminates an overhang on the business. With this major hurdle complete, we look to the future with confidence and look forward to continuing to update shareholders on our progress,” Dr Becker said.

Shares in Iofina were up 5.5% at 14.5p in the first hour of trading.

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