fft, I think the volume produced in the US is to small to supper larger plants.
Iofina is still a possible winner from tariffs as the US in deep shortage of domestic iodine. |
Or are spot prices for smaller volumes higher? |
Interesting that they don't seem to have sourced iodine from the USA and have built iodine contrast plants outside the USA as well. Would appear that tariffs weren't on their radar. Will they start to divert expenditure to the USA ?Are the hard to guarantee brine supply issues with IOF stopping long term contracts ? |
Thank you for clarifying, zendo102 and for giving extra context to your previous post.
That all sounds entirely reasonable to me. I think there is probably a good deal of stale frustration floating around here as to why IOF is still where it is, despite yearly new plants, a robust Iodine price and record production figures. We all have to call our exit point at some stage, but, I suppose, there's always that fear of missing out on the bigger prize, which is what keeps many of us stuck here.
Good on you for having made that decision and I wish you well! |
Serratia. Thanks as ever for being a voice of reason. I do think your RONIC is too high…but none the less very high.
On costs I think reagents)Hydrochloric Acid?) are a big percentage of the overall costs. I think US HCL prices moved up in H2….not something I have kept an eye on before.
Judging by the estimates we should have a cracking production figure for Q2 against the corresponding period last year.
I saw IO#2 was offline at the end of Jan- almost certainly for its annual maintenance program. |
 Senden11 - sorry for the late reply.
(long post, off topic)
You wrote: “Unclear as to whether this is a forward or backward-looking comment on your part re his [beercap’s] investment decisions?”
It’s neither; it’s all about the now. Too many investors get caught up in the past (making a profit on each investment, not cutting your losses, regrets and “if only” thinking) and others are too busy dreaming of a future (hopes, “what ifs”, spreadsheets forecasting well into the future with imperfect data and overly optimistic growth forecasts and expanding p/e ratios)
For value investing, real question is what is IOF worth now and are the shares cheap or expensive in the market? I prefer current metrics (p/e, price to book, yield, net cash) to speculation (e.g. discounted cash flow).
Your cost price is an irrelevance (except to your ego). Don’t fall in love with a share - it will probably not be reciprocated.
If you bought a car for £20,000 and you have a bit of a crash, it’s unrealistic to expect you’ll get your cost price if you sell it. Why should it be different for shares? I used to own a lot of IOF (for me at least) because I thought the investment case was strong. I’ve reduced my holding because the investment case isn’t as strong now in my view. The price I paid is immaterial.
Some around here are ego investors. They want the market to prove that their stock-picking skills are correct by insisting on a profitable trade each time. Often they are very slow to admit their mistakes. They tend to be over vocal, demand management changes direction (e.g. by instituting a dividend) because they are right (don’t you know) and understand the business better than management on the ground. I suspect they haven’t read many books on investments which detail the costly mistakes that even the best investors have made. Losing money on some shares goes with the territory.
The market will invariably humble these ego investors, though I hope they have the ability to self-reflect or think critically. Share investing should breed philosophers not arrogance.
If anyone feels annoyed by this post, I’d suggest they take a very close look at themselves and try to understand why - it’s more than just me being a “patronising tw@t”. I’m actually just a random, anonymous dude on the internet who you you shouldn’t care about. |
No reply from beercapafn on being too simplistic so going a little deeper. RONIC (Return on new invested capital). Obviously you need to make a return in excess of the cost of capital especially funding it by debt. Apple / Microsoft / Amazon run at 10 - 20% each year. Occasionally a few companies get up to 50% for a while eg Tesla hit that 2021 -23.
IOF spend $5m on a new plant which at present prices pays back in around a year ie 100%. That's a way better return than buying back shares.
Feel free to disagree and explain. I'm open to valid corrections. |
You might like to think on a couple of Chillpill's posts. IOF need both the ppm and the volume for any new plants. If you look for permits for disposal sites there are limited numbers doing large volumes. I know they'd put in even larger plants if they had the supply levels at a location.
It's not just a case of we've built this one and they're lining up to go. Can Optiva supply even larger volumes on a consistent basis allowing a larger plant to go in ? I've no idea. |
9458 zendo, 'How long you have been invested, the price you paid, and your belief that Iofina management has the wrong strategy should have nothing to do with your investment decisions' Beer's answer may have been the 'wrong answer' for you, but the right answer for many others! Unclear as to whether this is a forward or backward-looking comment on your part re his investment decisions?
Also, let's not assume that one person's timeline to profits fits in with everybody else's...some of us have been here a very long time and human patience does indeed run thin.
PS. I note that you have reduced your holding |
On a separate note good to see one of IOF’s biggest shareholders David Newlands has had a ten bagger in FTI. A paper profit of close to £20m by my estimates.
Congratulations to him.👏 |
IOF currently has the most complex investment potential in its history.
Could you expand on that ? Could you expand on why it's too simplistic ? |
That's just too simplistic, Serratia and Zendo102. IOF currently has the most complex investment potential in its history.
I am not saying that the current management profile has the ideal history and competency, but there is an opportunity afoot more than just iodine. |
New plant 100 - 150 tpa , cost $5m. Iodine $70, cost $35 probably less. Payback 1 year. Special dividend $5m and the company is worth $5m less so the share price adjusts down. Share buyback kills future growth. You only buy back if you've got no growth potential.
Ans keep building new plants. |
beercapafn, I’m afraid that’s the wrong answer.
You should only be invested here if you think IOF has enough value that you expect the share price to rise more than is likely with another investment.
How long you have been invested, the price you paid, and your belief that Iofina management has the wrong strategy should have nothing to do with your investment decisions. Trying to get back to your average cost price (or even to make a profit) is not the best way to look at any investment.
The investment case here has changed, and so should expectations. If you believe in Iofina’s roll out plan and that the market is mis-pricing the company, then stay invested. If not, cut your losses and put your money to better use.
I’ve sold shares in IOF and taken the hit, though a few remain. Selling at a loss is the only rationale thing to do if the investment case has changed. It can be hard, but it’s better to take it on the chin than rely on blind hope and waiting to be vindicated. For many here (me included), the initial investment in IOF was at too high a price, but I made a rationale decision to invest based on the imperfect information I had at the time. When new information comes to light, it’s best to change your view accordingly. |
Humm.
The question would then be, why are you invested here?
Answer:
I aim to get a return on my investment in IOF after 8 + years of my capital being at risk. |
Chillpill could be correct re stockpiling. In Dec 2023 Chile exported 1677 t,in Dec 2024 2543 t.In Jan 2024 Chile exported 1888 t. In Jan 2025 it was 948 t so it looks like volume pulled forward. Perhaps a price rise has also been signaled for 2025 bulk as big buyers are on annual contracts. |
The question would then be to you, why are you invested here? They have clearly said that they do not intend giving dividends until the forcible future. Repeatedly stating it on a bulletin board, will not make it happen sooner.
That aside, I think it is about time the board clearly state their reasons, why they are not building at least 2 sites a year.
This would start to see your return in capital, when the markets start to see good rises in production continuously every six months, rather than the drop rates we have seen over recent years due to poor output on older sites. |
Some of us are looking for a return of capital - not just more capital expenditure... |
One a year is not enoughThey have all these loan facilities What's the problem ?? |
I think the plan is one plant a year although I have a feeling these plants are generally bigger.
The biggest problem for IOF was the reduction in volumes that were permitted due to earthquakes at the SWD’s. The max volumes these days are less than 20k barrels per day- the plants have 35k day capacity.
The newer ones appear to be in closed loop systems where the water is recycled enabling higher volumes to be processed. |
Io12 needs to be announced well before that and build starts before io11 is completed surely |
I'm not sure we'll see a dividend soon given the capital investment in the new plants Io11 and the Io12 hopefully to be announced near to when Io11 is due to complete in Q3.Still patient with the progress of the new plants and Iodine prices doing well, hope we also get some other news perhaps on the Iofina Chemical side as hinted during podcasts late last year that may re-ignite interest. |
Just waiting for the maiden dividend however small! |
There is very little chatter these days on this board. Has it moved somewhere else?
Or has everyone lost interest? |
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