27th May 2020 12:48
(Alliance News) - Iofina PLC on Wednesday reported a swing to profit in 2019 after a substantial impairment expense the year before as well as higher revenue from crystallised iodine sales.
Shares in Iofina were up 18% at 17.18 pence in London at midday.
The company, which explores and produces iodine as well as manufacturing chemical products, reported a USD552,425 pretax profit for 2019, having made a USD1.4 million loss the year before.
This was in part due to a 22% revenue rise to USD29.2 million from USD24.0 million from increased crystallised iodine sales. What's more, a USD2.6 million impairment expense taken in 2018 did not repeat.
Earnings before interest, tax, depreciation, and amortisation rose 67% to USD4.4 million from USD2.6 million.
The company started construction of its IO 8 plant in 2019, which completed in the first quarter of 2020. However, the plant is currently idle as the supply of brine water has been restricted by the depressed oil price, as brine is a by-product of oil wells. Becker said Iofina expects the plant to be back online in the first half of 2020. The company is looking for alternative sources of brine.
Chief Executive Tom Becker said: "Over the course of the period we have continued to execute our strategy to expand operations whilst being a low-cost iodine producer. This, combined with a rising iodine price, has led us to achieve record iodine production and Ebitda levels for the second year in a row.
"The progress made has left the company in a stronger position than ever from which to resolve its current debt situation, and I'm pleased to report progress continues to be made in this regard and, although progress has inevitably slowed due to the Covid-19 situation, we remain confident that a debt solution will be realised ahead of the repayment date of the company's current debt package."
Iofina's term loan notes amounting to USD18.2 million are due for repayment on July 1, and Iofina lacks the resources to repay them. While it is in talks with potential lenders for refinancing the debt, so far no arrangement for repayment have been finalised.
Following a debt restructure in March 2019, in which Iofina's convertible loan notes were restructured as term loans, the company's debt stood at USD25.6 million. This was reduced through equity conversion and repayment to USD18.2 million as of the end of December.
By Anna Farley; [email protected]
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