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LONDON (Alliance News) - Iofina PLC on Monday said its pretax loss narrowed in 2015, as its focus turned to cost reductions during a period of declining iodine prices.
The company, which specialises in the production of iodine and chemical derivatives, reported a pretax loss of USD3.3 million for the year ended December 31 from USD6.7 million a year earlier, despite revenue dropping to USD20.3 million from USD25.8 million. This was due to cost of sales coming in at USD16.0 million, from USD23.2 million a year earlier, as continued cost reductions were achieved at its IOsorb plants.
Iofina said it produced a "record level" of iodine at its IOsorb plants of 569.1 metric tonnes of crystalline iodine for 2015, up from 327.7 metric tonnes in 2014, which is a like-for-like increase of 73%.
In order to achieve this, the company said it focused on its core area in Oklahoma, where five IOsorb plants are located, closing down its Texas operations in the second quarter of the year, due to the lack of volume of brine water at the site. At its Oklahoma operations, Iofina said it focused on the supply side reduction in raw material costs, strengthening its work force and reducing plant level operational costs.
Iofina said its earnings before interest, tax, depreciation and amortisation were positive at USD492,000.
Iofina added that it continues to implement a strategy of controlled, conservative expansion in the near term, while also planning for a more robust expansion using its IOsorb technologies, once iodine prices return to historic levels. Iofina noted that the recent stabilisation of iodine prices has been seen as a "positive sign".
Sales of iodine, iodine derivatives and other specialty chemicals globally are anticipated to grow for the group in 2016, it added.
The group said its first quarter production of 124.6 metric tonnes of crystalline iodine is in line with our expectations and the group is on track to reach its first half target of 250 to 270 metric tonnes of crystalline iodine.
"Despite the continued fall in iodine prices, Iofina has done well in executing its strategic plans and improving year-on-year margins. Sensibly, the board took the view in 2015 to focus on current operations, and cost reductions with a view to protecting our cash balances during a period of declining iodine prices," said President and Chief Executive Thomas Becker.
"We continue to explore and determine suitable locations for expansion and the board will execute our prudent expansion plans as market conditions allow," Becker added.
Shares in Iofina were up 18% at 16.18 pence on Monday morning.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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