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Come on then, explain this one after all the negative comments
Sadly have to agree Eccles. I really like the presentations Tom gives, he is enthusiastic and always upbeat. The BoD take risks, and most don't pay off. Maybe he's getting more wary of making any changes? It's outrageous we sit at 23p when iodine is $70 a kg. Or perhaps that is only for small volumes? If you had told me 5 years ago that when Iodine hit $70 we'd be producing less and less each year I would or have believed you. Holding, but it's reduced in the last 2 months. To be honest it seems I shouldn't have reduced. We'll see.
IO9 has been expected to be "operational in 6 months" for ages. How long can contract negotiations take? Nice to see the rise today though, and I'd like to believe you, and management. Seems a share for those with close company contacts who can get some inside information. Or for those who have time to pray a lot.
Creating a fuss about IO9 thats now projected to be a year late during a time of high Iodine price. An alternative to holding back sales to increase inventories as apposed to increasing production is one thing, but not taking advantage off a predictable price and demand increase is lamentable.
IO9 Delays have cost in turn over terms is between $6,000,000 to $9,000,000. This isn't prudent business. The BOD show incompetence in delivery on a regular basis.
Chill it has less to do with traders leaving and more to do with inept management letting down shareholders on a regular basis!
Not sure what all the fuss is about to be honest. They have decided to hold back selling inventory as they thought by delaying the sales they could get a higher price which they now have..better than just holding extra cash on the balance sheet.. They have an extra $2.1m of inventory which being at cost will have a very healthy profit margin on it when realised.
Anyway finncap increased price target by 10% on the back of the numbers and the fact that IO#9 is expected to be operational in 6 months and 10#10 in their words “hot on its heals”.
Looks like a lot of the traders from the Midas tip exited yesterday which is probably a good thing.
Reckon it could keep falling until one of the big shareholders steps in and mops up. How far they let it fall is anyone's guess. Holding and waiting seems the only option, but its certainly depressing. I guess this share has held up well compared to others recently and this could just be a correction.
Agreed, about inability to deliver #IO9. But does the company even need IO9, when it produces so little and yet cannot sell its production?
"With low production levels, inventories rose by a lot: Inventories increased $2.1M"
How is this possible? What is IOF not telling shareholders? something is not right.
I have zero trust in the CEO after all this obfuscation.
I wouldn't call it appalling, but must say I was expecting slightly better. The most upsetting item was the fact that IO9 is still in "final contract negotiations". That is ridiculous IMO.
CEO says "The Group has delivered a strong first half performance, particularly when compared to the exceptional H1 2021 period, which was heavily weighted to the sale of the excess raw iodine inventory that built up during Covid. With iodine prices increasing by 40% during the period, the Group has achieved higher profitability, which has also been supplemented by improved cost controls."
Looking at the accounts, it is is easy to see this statement bears no relationship with reality. He cannot deliver #IO9.
Worse than that, with low production levels, inventories rose by a lot:
"Inventories (increase)/decrease (2,103)"
How is this possible?
I sold recently and missed this rise, just couldn't risk further IO9 delays. To be honest I am expecting them, but GLA.
The company not delivering and just being fortunate in a high price environment is not an investment case for me. Quite disappointed with the lack of news here.
The above date is per the latest news release. No doubt the directors are desperate to have a positive outcome to their IO9/10 contract negotiations by this date to add to what I am certain will be excellent results. However, I think it is unacceptable to publish results on the last possible day allowed under the rules to do so. I blame the the near 72 year geriatric finance director who works from the UK when the rest of the staff work in the US for the interminable delays on the new contracts. He is clearly now very slow and scared of his own shadow and should be replaced asap. Surely Sneller with his £8m investment in the company will use his influence and voting power to see through the necessary change to give the company the dynamism it needs to capitalise on the extremely beneficial trading environment it is now in.
You ar correct about rising costs, but Iofina is the lowest-cost producers. Hopefully we will see them reverse the slight iodine production tonnage tomorrow. The back drop to these issues is an increasingly strong demand and selling price of Iodine. I'm holding for the time being as this has a lot further to run. Maybe with a bit more self belief, and a couple of wins could be the tonic, this could be a very profitable business.
The issue is fixed costs are rising and production is falling. That is why we need more plants and diversification into chemicals. It's down progress but profit won't skyrocket until we fix production IMO. That said my own assessment is a value well above here, but there are risks to assess. DyOR, I'm invested, but have sliced off some profit. That normally means we go up!
Mobilising 300K further troops & making Nuclear threats in latest speech, just announced ‘Times of Israel’.
Midas touch ?
I certainly agree with the conclusion of the article. The current share price should be well over double its current price.
I do not know how old the brokers reports that are referred to are but they must be well over 6 months old. How could annual revenue possibly be forecast to go up only 5% from $39m to just $41m when the average price of the product that is produced and sold has virtually doubled since the previous year and when the company’s latest forecast of its annual production is that it will be close to that of 2021 (518mt). The annual revenue for 2022 must be considerably higher than the measly forecast of $41m and annual profits must be considerably higher than $6.2m too. These are more like half year forecasts than annual ones. Another big plus is that the US dollar has appreciated by 15% against £ sterling since the beginning of the year and all the company’s revenue and accounting is in US dollars.
I await the interim results with great interest not just to see what I expect to be stellar results but to find out the situation regarding the long-proposed new IO 9 and IO 10 plants. If Becker has an ounce of self-respect left, he will not repeat his endless assertions that the contract completion on these is imminent. He will have to spell out the exact position. Hopefully he will just announce that the contacts are now signed and that commencement of construction is underway and we will all be even happier.
Part 2
Iofina's brine approach is friendlier to the environment and less expensive. The process has been designed for areas where oil and gas companies' waste brine contains plenty of iodine. Oklahoma is one of those places and Becker expects to start work on a sixth plant later this year, with another one coming on board shortly afterwards. With further plants on the cards, Becker hopes to double annual production to 1,000 tons within the next three to five years.
All the iodine that Iofina produces is used by its chemical division, turned into compounds and sold to businesses in a range of industries.
The group buys in a small amount of iodine from other producers too, and also makes compounds from fluorine and chlorine. These share similar properties with iodine and mean that Iofina is not reliant on a single chemical element for all its sales.
The firm spends time developing new uses for its raw materials too, so it can expand into fresh markets, such as the fast-growing semiconductor industry, which uses fluoromethane in the production process.
Iofina has had a troubled past. The group expanded too quickly a decade ago, when the Fukushima nuclear disaster in Japan disrupted the iodine market and sent prices soaring.
They collapsed a few years later, leaving Iofina with large debts and loss-making plants. Today however, the company is profitable with a strong balance sheet. Becker is ambitious but careful too, making sure that the firm does not repeat past mistakes.
Interim figures, released this week, should be encouraging and brokers expect a 5 per cent increase in full-year turnover to $41 million, with profits up by 26 per cent to $6.2 million. Growth is forecast to be even stronger in 2023, with a turnover of $46million and profits of almost $8million.
Encouragingly too, former star fund manager Richard Sneller is a big fan of Iofina. With a personal stake of almost 18 per cent built up over the past two years, he is now the group's largest shareholder.
Midas verdict: Iodine is an essential mineral and demand is growing across a variety of very different industries. Iofina is not just a low-cost producer – it also turns iodine and other chemicals into much-needed compounds worldwide. At 23.25p, the shares are deeply undervalued. Buy.
MIDAS SHARE TIPS: Iodine from Iofina is in demand and you can profit
Added value: Iodine produced by Iofina is in demand as an additive in salt and has many other health uses
Added value: Iodine produced by Iofina is in demand as an additive in salt and has many other health uses
Brazil, the US and the Philippines may have little in common. But they are among dozens of countries that add a small amount of iodine to their salt to ensure citizens do not suffer from iodine deficiency.
Iodine deficiency is the biggest cause of brain damage in the world. The mineral is essential for growth and development and is especially important for pregnant women. In the UK, however, salt is not iodised. Children and adults alike are expected to get their fair share from milk and dairy products, eggs and fish, but not everyone does, with scientists raising concerns that many people in this country suffer from a mild deficiency.
Iofina is an AIM-listed business based in Colorado, which produces iodine and turns it into compounds sold around the world. The shares are 23.25p and should increase substantially over the next few years.
The company has perfected a way of extracting iodine from brine that is left over during onshore oil and gas production. Iofina then turns the mineral into compounds used in a range of industries, from healthcare to nutrition to technology.
Inclusion in salt is essential in much of the world, but the biggest single use for iodine is as a component of special compounds – known as contrast agents – that make MRI scans clearer. Contrast agents help doctors to detect issues from tumours to heart failure and their use is growing as populations age and healthcare systems become more sophisticated.
Iodine compounds are included in certain statins as well. They are added to animal feed, used in paint to stop it going mouldy, feature in LCD screens and play a role in numerous industrial and chemical processes.
Demand is strong across the board, supplies are limited and iodine prices have been rising, reaching record highs of $70 (£60) per kilogram in recent weeks from lows of less than $18 a few years ago. Such lows are unlikely to be repeated in the near term, but chief executive Tom Becker has worked hard to ensure that Iofina is one of the lowest-cost producers in the world, making the group more resilient should prices fall from current levels.
Around two-thirds of the world's iodine comes from the Atacama desert in Chile. There, ore is mined from beneath the ground, broken up into small pieces using explosives, transported to special facilities and turned into iodine through a chemical process known as leaching.
You can find your trades on the other IOF page on this site. Also who is having a larf with the 123 trades?
I have been buying a number of these shares in recent weeks. Like you, I noticed that several of my purchases were not being recorded. When I looked carefully at my broker’s Contract Note I saw that they had bought the shares on the NEX exchange and not LSE. I do not know why they do this. It seems very strange. Consequently, however, the purchases are not recorded on the LSE site as they are outside their remit.
I am not suggesting there is any causal correlation but the only other time I know my broker did exactly the same thing for one of my other investments, the company was shortly taken over at a substantially higher price!
Lse showing no buys yesterday but I know that 25670 were bought yesterday afternoon @ 23.35p. Looks a reasonable medium term punt if Board are able to capitalise on the strong Iodine pricing.