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LONDON (Alliance News) - Iofina PLC on Monday said sales have surpassed the total sales made in 2015 despite a significant fall in prices but said production in the second half will be much lower than expected because of a shortage in water supply thanks to local fracking operations.
The company produces iodine and iodine speciality chemical derivatives from operations in the US, specifically in Texas,Kentucky, Montana, and Oklahoma.
Iofina said sales since the start of 2016 have now surpassed all of the sales made in 2015 despite a 20% decline in iodine prices throughout the year.
"We have been encouraged by the demand for Iofina's iodine and non-iodine based products during the second half of 2016 and anticipate that this demand will carry into the start of 2017," said President and Chief Executive Tom Becker.
Sales of iodine and iodine derivatives in 2015 generated a total of USD14.2 million in revenue while non-iodine products generated a further USD6.2 million to take the total to USD20.3 million.
Iofina produced a total of 569.1 million tonnes of crystalline iodine in 2015, a record for the company, which had guided that production would rise further in 2016.
However, on Monday, the company warned it will not meet its second half guidance for the year of 250.0 to 270.0 million tonnes of iodine, lowering its target to 215.0 to 225.0 million tonnes.
"Iodine production has been consistent during the year but recently production at our IOsorb plants has slowed due to suppliers diverting water from Iofina to their own fracking operations. Water quality issues have also contributed to the recent slowdowns. While fracking is good for long-term brine supply, Iofina will not meet its previous second half of 2016 iodine production guidance," said Iofina.
The company said higher production levels are anticipated to return in "early 2017".
Production in the first half of 2016 was 255.6 million tonnes of iodine, implying full year production will be between 470.6 million to 480.6 million tonnes - 16% to 17% lower than 2015.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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