Iofina PLC 2013 Review and 2014 Outlook (6895V)
December 17 2013 - 2:00AM
UK Regulatory
TIDMIOF
RNS Number : 6895V
Iofina PLC
17 December 2013
17 December 2013
Iofina plc.
("Iofina" or the "Group")
(LSE AIM: IOF)
2013 Review and 2014 Outlook
Iofina, specialists in the exploration and production of iodine
and iodine specialty chemical derivatives, provides the market
today with a consolidated review of 2013 and the Board's outlook
for the year ahead.
The Group's IO#1 iodine extraction pilot plant based on Iofina's
WET(R) IOsorb(TM) technology ("IO#1"), recently celebrated its
successful first year anniversary. This combined with the continued
production at IO#2, which recently underwent extensive planned
maintenance to refresh high levels of iodine production in the
tower, and completion of the first digitally designed plant, IO#3,
confirms the rollout and successful implementation of the Group's
corporate strategy. Although not fully optimized, the three
combined plants are averaging in excess of 1,000 kilograms of
iodine per day, satisfying the Group's internal iodine demand while
building inventory for future outside sales.
Construction of IO#4 and IO#5 plants has now reached the
mechanical fit out stage. Steel fabricated structures await the
delayed towers, one comprising of titanium and one set in fibre
glass. Both sets are expected on site by the end of December.
Anticipated plant start-up is in Q1 2014, as previously advised.
Construction on IO#6 has commenced with the decision to proceed
with a site in close proximity of the Group's IO#2 and IO#3 plants.
The combined annual production rate from IO#1 through IO#6 is
expected to be in the range 700-1,000 tonnes of crystallized
iodine.
Current planning now envisages construction of up to three
additional full size plants in 2014 beyond the plants currently in
construction. These plants will bring the number of plants to nine
with the anticipated inclusion of some additional mobile plants.
The planned mobile unit's conceptual design is being finalised and
the Company is planning to seek turnkey contracts for construction
shortly. The number and location of these mobile plants is under
evaluation.
Overall revenue in 2013 is likely to be comparable to 2012
levels. This is due to expected 2013 shipments at Iofina Chemical
now being delayed into 2014. External iodine sales which were
previously expected in 2013 are now expected to commence in 2014,
resulting in an inventory build-up. To the extent that iodine
produced by the Group is used in the production of iodine
derivatives and not sold outside the Group, the value of such
iodine production is a component of the derivatives revenue at
Iofina Chemical and will not appear as raw iodine revenue from
Iofina Resources. The Group's overall margins benefit from using
iodine produced at Iofina Resources, due to its advantageous
production cost. Considering the lower revenue expectations, EBITDA
excluding share option charges, will likely be similar to 2012
levels.
In 2013 a decline in iodine prices of greater than 20% has
occured. The Board believes the Group remains well positioned
competitively as a result of its advantage of lower operating costs
as compared with other producers. As a result of the announced shut
in of production from certain higher cost iodine producers in 2014
the Group believes the price of iodine will stabilize and may begin
to rise in the second half of 2014.
The Board also believes the mix of product sales achieved in
2013 sets the stage for good growth in derivatives revenue in 2014.
Third party sales of produced iodine will commence in 2014. The
Group intends to market both crystal and prilled iodine. Prilling
unit design has been completed and site selection is underway. The
earliest expected completion of any prilling unit is second half
2014.
While the Group continues to secure additional sites for Iofina
conventional production plants, the opportunity to take on closed
down oil and gas production sites which have high iodine levels in
the produced brine is being examined. With the success of Iofina's
technology, this approach could well prove to be commercially
attractive from iodine production alone with no capital cost for
wells.
Commenting on today's news, CEO George Lantz, said: "Whilst we
expect revenues and EBITDA to be comparable to 2012, 2013 has seen
the successful deployment of Iofina's IOsorb technology along with
the continued growth of its derivatives business. Taking stock of
the iodine production opportunities, increased derivative sales and
prilling that are open to Iofina, 2014 signifies an exciting year
for the rapidly expanding Group."
For further information, please contact:
George Lantz, CEO
Iofina plc
Tel: +44 (0) 20 3006 3135
www.iofina.com
Ben Colegrave/Chris Sim/ James Rudd
Investec
Tel: +44(0)20 7597 5970
Media Contact:
Dominic Barretto/Anna Legge
Yellow Jersey PR Limited
Tel: +44(0) 7768 537 739
About Iofina
Iofina specializes in the exploration and production of iodine,
iodine specialty chemical derivatives, produced water and natural
gas. Iofina's business strategy is to identify, develop, build, own
and operate iodine extraction plants currently focused in North
America based on Iofina's WET(R) IOsorb(TM) technology. Iofina has
iodine production operations in the United States, specifically in
Texas, California, Montana, Oklahoma and Wyoming. The Group has
complete vertical integration from the production of iodine in the
field to the manufacture of the chemical end products derived from
iodine to the consumer and the recycling of iodine using iodinated
side-streams from waste chemical processes in Europe, North America
and Asia. The Group utilizes its portfolio of patented and patent
pending technology, proprietary methods and trademarks throughout
all business lines.
This information is provided by RNS
The company news service from the London Stock Exchange
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