This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (“MAR”), and is disclosed in accordance with the company’s obligations under Article 17 of MAR.
15 April 2021
(“Iofina”, the “Company” or the “Group”)
(LSE AIM: IOF)
Q1 2021 Update
Record Q1 Sales, Iodine Market Recovering
Iofina plc, specialists in the exploration and production of iodine and manufacturers of specialty chemical products, today provides an update to the market regarding its activities during the first quarter of 2021 (“Q1” or the “Period”).
- Strong recovery in the iodine market with sales demand at pre-pandemic levels
- Backlog of deferred orders processed pushed sales for the quarter to record levels
- Global iodine spot prices are increasing and Q2 prices are expected in the $34-$37 range
- Production of 108.2 MT of crystalline iodine (2020: 129.7 MT)
- Decrease compared to Q1 2020 largely due to abnormal extreme weather for two weeks in February
During the Period, the Company achieved record sales of iodine and specialty chemicals, as a result of a significant recovery in demand in the iodine market combined with the availability of crystalline iodine inventory that had been stockpiled in H2 2020.
The Company produced 108.2 metric tonnes (“MT”) of crystalline iodine from its five operating IOsorb® plants in Oklahoma versus 129.7 MT in the same period in 2020. This lower-than-anticipated figure is largely a result of unforeseen storms and extreme cold in the central United States during the month of February, which took production wells offline for approximately two weeks. Additionally, saltwater disposal network system maintenance has resulted in lower water than expected at some plants. With weather related production issues now resolved, Iofina is working with its brine suppliers to maximize supply to our IOsorb® plants. The Company is likely to achieve H1 production of approximately 250MT, below the 285-305 MT forecast.
Following a slowdown in H2 2020 given the COVID-19 pandemic and associated effects on the openness and vitality of the U.S. and global economy, the iodine market looks set to recover moving forward with prices steady in Q1 and rising in Q2 2021. Iodine prices are currently at the $34-37/kg level on the spot market, similar to the levels seen in the same period last year, and the Company remains well placed to deliver good margins on its sales.
The outlook for iodine prices and demand is likely to be directly related to the rate of the global economic recovery moving out of this COVID-19 period. In particular, iodine demand for X-ray contrast agents, heat stabilizers in automotive applications, and LCD screens, which was significantly reduced last year, is now recovering rapidly. Additionally, Iofina Chemical had larger than expected demand for iodine based biocides in the Period.
The Company is also currently evaluating iodine growth locations and timing, and will prioritise the stability of water supply to our current and future plants. The next potential expansion will most likely be implemented around Q4 2021 or Q1 2022.
The Company is planning a webinar for current and potential investors that will likely take place around the time of its full year 2020 results announcement, targeted for May 2021, and the Company will update the market on this in the near future.
Commenting, President and CEO Dr. Tom Becker, stated: “This quarter, Iofina has seen excellent sales for our crystalline iodine and specialty chemical products, a testament to the Company’s resilience and ability to capitalise on market recovery as we and the wider economy emerge from the challenging COVID-19 period.
“Despite seeing lower production this quarter due to factors outside of our control, we were pleased with the sales figure for the period and are particularly encouraged to see the strong state of the iodine market and its recovery.
“Following the Company’s debt refinancing in 2020, and our consistent production diversified across plants and product lines, Iofina is on track to prudently continue its growth strategy. I look forward to updating the market further with our FY20 financial results in May.”
Dr. Tom Becker
CEO & President
Tel: +1 859 356 8000
Christopher Raggett/Giles Rolls/Tim Harper (corporate finance)
Tim Redfern (ECM)
Tel: +44 (0)20 7220 0500
Charles Goodwin/Joe Burgess
Yellow Jersey PR Limited
Tel: +44 (0)7747 788 221
Iofina plc (AIM: IOF) is a vertically integrated Company that specialises in the production of Iodine and the manufacturing of specialty chemical products. As the second largest producer of iodine in North America, it comprises three USA entities; Iofina Resources, Iofina Chemical and IofinaEX.
Iofina Resources develops, builds, owns and operates iodine extraction plants using Iofina’s WET® IOsorb® technology. Iofina currently operates five producing IOsorb® plants in Oklahoma and is consistently using technology and innovation to improve and expand its operations.
Iofina Chemical has manufactured high quality halogen speciality chemicals derived from raw iodine, as well as non-iodine based products for over 35 years.
Iofina’s newest subsidiary, IofinaEX, is fully licensed to process hemp in the state of Kentucky and is currently managing a hemp seed investment in this market.