Iofina Share Discussion Threads

[seernb] 18/9/2014 18:16

There's an old rule of thumb in the stock market which suggests that in the event of a profit warning the share price should fall by twice the profit shortfall. In the case of Iofina it's a production/revenue warning rather than a profit warning, but since Iofina is arguably valued on production numbers, the effect should be similar. In this case we have a 15% production shortfall but only a 15% decline in price. It's also true that this isn't the first warning the company has given and one can easily imagine it wont be the last. With all that in mind I have gone short at 48p with a near term target of 40p, and a longer term target of 30p. If Iodine prices continue to fall then this might well retest the 20p lows we saw earlier this year.

[brucie5] 18/9/2014 18:06

I think today's action has rather brought home the short risks of this share, and I'm glad a scaled down my holding on Tuesday. Will wait for the base to reform. I'm assuming it's no more than a temporary blip, while we get our mojo back..?

[crosseyed] 18/9/2014 17:36

On the face of it, 40mT/month from 6 producing plants should be a doddle. The 40.5 mT achieved in May was with just 4 plants of which IO#4 was likely on reduced production then being only recently brought into service.

A concern at the moment is that with these low production volumes, IOF is certainly not achieving the low production costs that are frequently bandied about of around $20/kg. That sort of low cost level requires a production output running at about 50-60 mT/mth, ie about $10 mT/mth/plant, in order to reap the benefits of scale in order to reduce unitised fixed costs. In fact, I would put the cost at around $35/kg at the current mid-20 mT production level. That's uncomfortably close to the market price of raw iodine which was last reported at around $42/kg according to IOF though other research posted here suggests it moght be lower. Of course, IOF uses (most of) its home-produced iodine for manufacture of derivative products which allegedly have very good margins.

c

[bocker01] 18/9/2014 17:29

I would agree with that C. The water has to go somewhere!

[bocker01] 18/9/2014 17:29

I would agree with that C. The water has to go somewhere!

[crosseyed] 18/9/2014 17:18

I'm not sure that I agree with the interpretation that the SWD site updgrade will result in a permanent reduction in available brine. In fact there are two references in the RNS as follows:

A combination of factors including ... a Salt Water Disposal (SWD) site upgrade by an operator that took longer to complete than forecast resulting in plant downtime, contributed to a decrease in production.

In light of ... lower water volumes after the SWD site upgrade, Iofina anticipates that its overall 2014 crystallized iodine production will be circa 325-350MT of crystallized iodine. This ... is below current market forecasts and managements targets.

I don't think the second reference to the SWD is particularly well-worded, but my understanding is that the SWD site upgrade was a temporary event.

c

[kattatogaru] 18/9/2014 17:09

Thanks Josh. If we take the mid-point of September's estimates given today (27.5 MT), that requires mean output of 36.5 MT per month for the 3 remaining months to reach 325 MT and mean of 44.8 MT to reach 350 MT. That looks like one serious stretch now given that we've only exceeded 30T a month for a single month this year. The question is, how confident are they of reaching that target? It would be very, very stupid to give targets that are unachievable, again, but I'm less confident than I was before that they really have a handle on the risks.

[monkeymagic3] 18/9/2014 17:07

hew 18 Sep'14 - 16:48 - 24648 of 24650 0 0

Cheer up, things could be worse:

CEO and COO disappeared, most of the company's cash missing.




The year is not over yet!!

[bocker01] 18/9/2014 16:57

It is slow and it is frustrating but a doubling of last years output and a thirty percent increase in chemical revenues will be an achievement. With the ability to process 800 tons pa, I expect continued chemical growth and lowering of unit costs on the chemical as well as iodine production side. Just a shame that expectations have continually been raised above what was realistic. I get the impression that Becker intends to be realistic.

[cyberbub] 18/9/2014 16:56

Yes we are not a highly ropey chinese company with phantom accounts..nd disappearing accountants!

We are a profitable company based in a developed country, producing a product with high demand using a patented process, with credible (albeit somewhat tarnished) management, and a bunch of hidden assets to be developed... and don't anyone forget it!!

LOL

[hew] 18/9/2014 16:48

Cheer up, things could be worse:

CEO and COO disappeared, most of the company's cash missing.

(Headline on a stock market statement issued by German-Chinese shoe retailer Ultrasonic - thanks to the Telegraph City Update.)

[cyberbub] 18/9/2014 16:47

About 35 tons per month required for the last 4 months. Seems achievable if they can genuinely overcome the constant niggly problems from the summer...

[bogg1e] 18/9/2014 16:44

About 30-40 tonnes per month.

If they can hit 340 then IOF will have doubled on last years production. We've now surpassed last years production of 171 tonnes and achieved last years revenues with 4 months to go. We are on course, just slower than hoped for.

[josh_ftm] 18/9/2014 16:41

Katt....

Q1 – 47mt
April – 21.8
May - 40.50
June – 30.60
July - 24.60
August – 23.60

2014 production thus far : 188MT

[kattatogaru] 18/9/2014 16:34

Has one of the 'regulars' here totted up total production to date this year? It's September and they expect to produce 25-30MT by the end of the month, and 325-350 tons by year end. I'm concerned that this is really quite a wide margin of error (25 t is one whole month's production at current rates, and we're only 3 mo from year end). That implies a lot of uncertainty even though they's supposedly now normalising production.
So, how much production would be needed in the last 3 months of the year to hit the minimum and maximum targets? That would give us an idea of what they now estimate to be a 'normal' run of production.
If they miss the minimum target, I may sell up.

[beeezzz] 18/9/2014 16:26

and relax...

[iofra] 18/9/2014 15:44

thanks for the info guys

[superg1] 18/9/2014 15:42

iofra

Leggit said he spoke to the listings folk who stated the hearing had happened.

It turns out he was right. I'm not sure if was him or others that said the timeframe for a decision is 90 days.

I couldn't find any reference to 90 days, although I haven't gone to great lengths on the water site to establish that.

I did however note that some post hearing decisions can come well before and well after 90 days.

So personally I'm completely ignoring the 90 days until I can find something that suggests otherwise.

To me it could be tomorrow, next week, next month, or next year. One would hope with the recent news that they have shortened some timelines on change of use processes, that they will get on with the decision. The driver for the recent changes is oilfield demand for water.

So personally I'm not hanging my hat on 90 days, but can't think of a valid reason why they would just drag it out for an extended period.

[thailand] 18/9/2014 15:02

Was it Mr Big who bought up all those high power hoovers recently before the EU made them illegal?

[joeblogg2] 18/9/2014 13:59

Another rns knocking the wind out of long term holders. Can only hope they have learnt from this and all the tweaking of the plants is now done and hope for some good news on water soon!!

[festario] 18/9/2014 13:58

I appreciated it MM3, I am tempted to use ADVFN search to find any other usages of the word on the site today.How do I delete the history to prevent my wife catching me?

[monkeymagic3] 18/9/2014 13:47

Good use of nipples again there.

[angel of the north] 18/9/2014 13:41

GAH still falling - going to be a good turnaround shortly. This is a good company with great potential imo.

[orslega] 18/9/2014 13:38

share price holding up well.....considering...