Iofina Share Discussion Threads

[dcgray21] 26/4/2014 19:20

Bogg1e- I believe they mentioned factoring receivables as well so that would de risk the issue - if it were to arise - of delayed collections.

[monty panesar] 26/4/2014 18:55

Boggle,

It will be interesting to see how quickly iodine production increases. As you say quite important to get production above 1t per day. Inventories must currently be low due to record sales and low production. Q1 sales must have been over $5m judging by last years sales. Taking the 60 day payment cycle you might think a further $3m+ might be due in which will help offset the 1m due out for completion of the plant build.

Admin costs rose last year but that should fall as they do the cost cuttings they said they are doing.


Monty.

Edit. Just checked and IOC had sales of 11.5m in H1 2013 so Q1 sales could possibly be above 6m but best be conservative at this point.

[bogg1e] 26/4/2014 18:39

Monty, the only problem i see there, is that we do need the plants to achieve decent production. We cant afford for any more hiccups, in particular for IO2. I'm still going through the accounts but it strikes me that yearly admin costs etc + interest on debt to be paid + $1m for IO6 capex equates to about $10 mil for 2014. We have in cash about $2m + $6mil-ish in CDs (Certificates of deposit) that mature and are accessible this year + $2mil+ in iodine inventory, so liabilities for 2014 vs cash equivalents for 2014 is approximately equal. So provided that IO1 and 2 perform close to their optimum + the markup from IOC should leave the company cash positive at the year end. Im concerned though about 2 things, firstly costs are fixed and regular such as wages but invoiced revenue may take longer than the 60 days required to receive, secondly if IOC is to process approximately 1 ton of iodine per day and we have say 20-25 (???) tonnes in stock, then we have enough iodine plus ongoing production to see us through a month or so. If collectively, IO plants can produce about 1 ton per day then we should be ok and not have to buy in iodine, but it all relies on optimum performance from Io1 and 2. by the way, do we know the weight/tonnage of the iodine in stock. 60 tonnes is quoted above, but we were given a value for the iodine, not its weight, now if the value of iodine in stock is valued at cost of production, then we have a lot of iodine, if it on the other hand, is based on its resale value then it will be considerably less. Does anyone know for sure how much iodine inventory we have? Thanks.

[monty panesar] 26/4/2014 18:01

One of the important things from yesterday(not that it was concern to many lth's) was that not only did the company say they don't need to raise finance the Auditors agreed with them as well.

[che7win] 26/4/2014 17:40

No stamp duty from next week:

[crosseyed] 26/4/2014 15:56

engelo et al,

Regarding external sales of raw iodine and the statement that you mentioned in post 20151 from RNS of 29/01/2014...

Iodine Sales
The Group was encouraged by its first external raw iodine sales in January and will continue to market raw iodine externally as production increases from new plants. January sales for the Group are as planned and order activity is promising.

However, in the Chairman's Statement of the Annual Report 2014, Lance Baller states...
With the winter weather breaking, recent production from IO#1 and IO#2 has returned to expected levels. The addition of IO#4-IO#6 is expected, at this time, to result in production of circa 400 metric tonnes of crystallized iodine in 2014. This rate of production will satisfy requirements at Iofina Chemical and set the stage for sales of raw iodine to both new and existing customers.

That would suggest that a sale of raw iodine in January was a one-off. With just 47 mT produced in Q1 2014, plus perhaps another 15 mT from re-cycling at IO Chemicals, there was a shortfall of 28 mT assuming that derivatives production was running at the maximum single-shift capacity of 90 mT (30 mT per month). So presumably that shortfall, plus whatever quantity was sold directly in January, must have come from inventory. With production greatly curtailed at IO#3 and IO#4 and none from IO#5, it looks to me that there will again be a shortfall in required supply for derivatives production in Q2 2014. Again, that would presumably be made up from inventory, perhaps not too much (~5 mT) though there might be some production from IO#6 starting towards the end of Q2 (perhaps from June). But I would not expect there to be any surplus to sell directly except from inventory.

How much raw iodine might there plausibly have been at year-end 2013?

gaudolinium (post 20015) suggested that the inter-company value of home-produced iodine might be $28/kg derived from the inter-company sales of $4.8 million (see Note 23), all assumed to be iodine, for the annual IOsorb production of 171 mT. ($40/kg for 2012).
[The figure of $28/kg is given credence in the Annual Report where LB indicates "under $30/kg". That figure happily accords with that derived in my own spreadsheet, at $27.61/kg for the year; the model also indicates a cost of $20/kg when normal service is resumed.]

Note 13 Inventories indicates Raw Materials valued at $3,419,291 at year-end. Presumably that would include materials other than iodine, so let's assume that 75% of the value is iodine. My estimates for iodine sources over H2 2013 based on 6-month consumption totals are:
IOsorb : 65% @ $25/kg (average over H2 2012)
Re-cycled: 10% @ $20/kg (opex is a complete guess)
Bought-in: 25% @ $45/kg
That suggests inventory was 87 mT at year-end. Is that plausible? It is enough for 3 months' derivatives production. Similar logic applied to H2 2012 suggests inventory of 25 mT. That would imply a build-up of 62 mT during 2013, all bought-in. It is not outlandish given the erratic nature of IOsorb production throughout most of 2012-2013 when the company's revenues depended on keeping IO Chemicals safely supplied.

As a corollary, iodine inventory at the end of Q1 2014 would be 59 mT less whatever might have been sold directly in January.

c

[ammons] 26/4/2014 13:17

superg, where did you get your RB Energy figure of $41 from when their March statement says $29? Cyberbub reads the statement differently to the way I read it. Do you have a source for that number?

It will be very interesting to see how Chile implements the changes they propose because, unless it is done in an evolutionary way (over many years), then the industries having to make the changes will be wrecked. Time will tell I suppose but I am not convinced that the new government would be stupid enough bite off the hand that feeds it.

I must admit I did like the sound of IOF's suggested opex though the chief bear over the water is questioning it. Made me feel much better after the near heart attack I had when I read the production update on 23rd.

[kirk2] 26/4/2014 13:12

50p next week ENJOY

[florence10] 26/4/2014 12:53

Fest,if it winds you up,just use the filter.

[florence10] 26/4/2014 12:53

Fest,if it winds you up,just use the filter.

[festario] 26/4/2014 12:19

Masurenguy does seem a tad unbalanced, but I genuinely want to read and contribute to this thread using iphone, but it is nigh on impossible if someone uses bold or coloured fonts.Sorry to those who think its trivial, but those who have been around IOF for a year or two, they know I am no troll. Trolls are anonymous. Many on here know where I live and who I am. Several of you have my email address too. Now, can we get back to discussing our investment?

[micknickbanny] 26/4/2014 12:03

Cheers for that Bobsworth, it could be that it was Mister Big's comment which has been circulated around the rumour squads

[bobsworth] 26/4/2014 11:49

You need to ask Mr Big because this what he wrote in post 19038

"Here's a theory for you - if I was running the company I might do a long term deal with ( Japanese ) to secure supply and do a financing deal with them.
They now have a flow of iodine . "

[che7win] 26/4/2014 11:48

Netley,
So it's not a trick, that's ok then, I will engage this once on my terms as it suits me ;-)

The margin of safety at these prices is favourable, certainly better than your TUNG which has collapsed 50% recently, maybe you switched over to here?

I bet you have no idea what EPS you expect there, a P/E of 51 on next years earnings expectations of 4.7p, do you agree? What's the turnover there, oh yes £800k. And the market cap? £220m you say?

How do you value it again?
"N3tleyLucas 22 Oct'13 - 13:03 - 25 of 26 0 0

It's easy to value mate, 100m x share price .. you mean judge it against peers and the general market?

Now that's tricky, no broker or company est's yet. My rule of thumb is MV/10 = pre-tax 2 years out = about right. So £23m FY 2015, more and it's cheap, less dear.

Of course that's my blunt measure of good/bad value... there are certainly more refined ways."

Are you for real, you want me to predict 2016, can I use your rule of thumb? How about you predict your heavy oil play 2016 first? What a heavy slog over there, I left above 200p, better to stay with lower API 40-45 plays, much sweeter.

There are a lot of variables at play here, the downside risks will become upside next year as brine supply becomes surplus as indicated Wednesday. The insiders and those talking to the company understand why the rerate was so quick.

On EPS, even 500 MT next year gives a P/E around 8 at current prices, that against relentless growth.
Do I need to spell it out to you?

If they do nothing, growth in iodine production:
2012: 17 mt
2013: 171 mt (1000% increase)
2014: 400 mt (134% increase)
2015: 1000 mt possible(nothing this week rules that out), even if only 500, it's still a 25% increase.

As you can see, there is nothing to stop the fantastic growth, this is the year we become cash flow positive. Next year, the gearing effect will kick in even more as large fixed costs such as the core admin trails EPS growth.
Iodine increases in price flow straight to the bottom line, upside risks.

I'm sure you've worked out my answer based on above, 1000MT is realistic.

The more plants, the less impact of brine disruptions, IOF please diversify geographically and by operator going forward!

A capital injection speeds up the above growth, it will be managed accordingly.

PS: Congratulations on your quick punt here, a pity you sold out too quick, but then you were totally misguided in your cash/fund raising thoughts the day before. I guess that's the difference between me and you, I do my own thing regardless of others.

I declared I was purchasing Thursday which I did at 25.1p.
Yesterday, I bought again at 30.7p, couldn't buy quick enough to be honest.

[micknickbanny] 26/4/2014 11:37

just speculating but are there any thoughts from anyone about the Japanese, (Toyota), possibly entering into some kind of business deal with Iofina to get the business motoring

[alfie4048] 26/4/2014 11:33

POST OF THE WEEK


Albany30
25 Apr'14 - 17:45 - 7519 of 7531 2 1


Anyone seen Netley? He was in for Xcite at over 100 and it's 66 now.

He was in Sirius at 25, it's now 9.
Ouch.

He was in Cloudbuy in 50s and disappeared when it started to sink to the 30s. Oops.

He's been in FUM in high 70s (hence why he posts here as jonnybig, pumping FUM) and now, many months later, he is tip toeing (as much as a 20 stone mess can tip toe in a caravan) towards break even . . . the holy land for Netters.

Is there any record of this lardy lad ever ever turning a profit in a share?

..........................................................................

[neddo] 26/4/2014 11:04

problem with my board, won't spell properly first time?

[n3tleylucas] 26/4/2014 11:03

Cheggers, ffs just tell me what you think 2015 & 16 will be? It's not a trick question.

[neddo] 26/4/2014 11:02

well, got the tomatos, ccumbers peprs etc in the green house lettuces, potatoes etc runner beans In the pots cut the lawns shortly, live in the countryside in n- wales, tonight ,in my little local small pub, only about a dozen their, a few bitters followed by a couple of large jamiesons and game of dominoes, paradise, people who live in cities don't haveu this kind of life, what yo think net, got to like you pal,

[che7win] 26/4/2014 10:46

Copper continues to recover:

[neddo] 26/4/2014 10:41

got more at 24.84, almost the same as my original buy,

[che7win] 26/4/2014 10:40

On the water, the company told indmin the following:

UPDATE: Iofina CEO says water refusal "part of the process" in Montana

Although the development of Atlantis is billed as 'non-core,' the latest development is a headache for Iofina, which could see its production capacity grow substantially if the Montana project is successful

US iodine producer Iofina Plc said today that it will continue to seek approval for water rights in Montana despite the fact the State of Montana's natural resources department has refused its initial determination.

The company told IM that it was told that its application...

[neddo] 26/4/2014 10:38

hi net, just a bit of fun, not much humour on here,