Iofina Share Discussion Threads

[florence10] 23/1/2014 18:15

Frog1,my comment was aimed at Longsight.

[shonny] 23/1/2014 17:20

SHONNY
22 Jan'14 - 21:47 - 14928 of 15021
A further dive coming up tomorrow as realism sinks in.



Looks like I got that right then and so it shall continue. I expect this to drop into the seventies next week.

It's turning into a right disaster for the rampers. They need a huge rabbit to be pulled out of the hat now. £3 by xmas anyone? Now that would be magic.

[frog1] 23/1/2014 17:04

pcjoe

No. The $21 per kg should be used to calculate gross margin. In the 2013 interims there is an admin charge of around $5 m per year. chewin said the sales force and management are in this $5 m. So after calculating GP for IOF Chemicals and IOF Resources, the $5m should then be subtracted from the sum to give Nett before interest and tax as per my post yesterday.

[florence10] 23/1/2014 17:00

How longsighted of you!

[frog1] 23/1/2014 16:57

bobsworth

That's the bottom end of the only guidance provided by IOF. If I was the FD or MD I would be working to set expectations at that. One of the reasons we had the big falls has been unrealistic expectations in the market that have been missed, with people putting their own numbers on production etc.

If I was setting bonus targets, I would insist on all 9 plants operational and 900 mt produced or revenue $47.5m as the base bonus number for the MD. This is nearer top end of guidance so far. Over achieve on that and get more bonus. That would raise eps to 9.5p assuming $45 per kg sale price and $21 per kg cost. I suspect at this level, the cost per kg will fall though. Having said that, I think Numis said $21-$23 per kg.

The inventory level at end of 2013 should give some scope for lower production and still hitting $47 million.

[frog1] 23/1/2014 16:45

Can someone show the complete note.

phoenixs, monts12, If they had that in the note the error is obvious, the analyst should be fired. If anyone sold on that it is their own fault for not checking.

Anyone who held in any size would have checked, I still think the bigger issue was the change in revenue from Investec's $77m to Numis $40m. If they hit the $40m they can just avoid a fund raising. If they miss these numbers they will have to tap the market again and that will spook some holders.

[longsight] 23/1/2014 16:42

superg

maybe the market understands it better than you do.

I'm reading this BB in vain - there is no interesting discussion on why IOF dropped in value - & what it is worth now.


That last RNS update was imo concerning. I have no clear view on opex or sale price. What is "optimisation"? Sounds like a fancy word for this process isn't working very well & we are fiddling around with it. I don't trust the opex assumptions. And I don't trust the sale price assumptions either. I sold some time ago & never had any interest in buying back at any price

[tsmith2] 23/1/2014 16:40

The numis note will have the details of the analyst who penned the noted..anyone brave enough to email him/her to ask them to confirm..

[pcjoe] 23/1/2014 16:37

Just to be clear on this - The opex figure of $21 per kg used by Numis contains all costs (management,finance charges, overheads & royalties etc) re our extraction division?

[che7win] 23/1/2014 16:34

frog1,
your figures are spot on as I stated yesterday - phoenix is on the ball on this one - his post below:

phoenixs 23 Jan'14 - 16:28 - 15010 of 15012 0 0

[bobsworth] 23/1/2014 16:32

700mt this year!
1250mt next year!
That's unbelievable and just playing it right down to be sure to break a target!
IOF#1 to 3 alone are capable of knocking out 700mt a year.
As for next year 9 plants producing 1250mt indicates each plant averaging just 138mt each and nil from any new plants rolled out in 2015.
Just unbelievable!

[monts12] 23/1/2014 16:28

frog
Numis have stated $21 opex in the main body of the note but have neglected to use it in their figures, basically using only IOC's 20% mark up as profit!
Someone remind me never to give Numis any credibility, utterly incompetent.

[phoenixs] 23/1/2014 16:28

frog1,

from what I hear they have used 0.3p and 2.2p... hence the outrage

[superg1] 23/1/2014 16:24

So the figures are badly wrong it seems.

No shock really as in my book they invented an unknown revenue source that no one knew about in the note

This field has the potential to produce up to 80,000 bpd of water, which Iofina believes can be sold for c.$1-2 per barrel at ambient temperature, rising to c.$4-6 per barrel for warm formation water.

That 80k bpd warm formation water is the best one, 80k bpd @ $4 to $6 pb meant a $118m to $170m revenue stream, which of course turned out to be complete tosh.

I kept saying the market doesn't understand the iodine and water, and here we have it, in black and white.

[bobsworth] 23/1/2014 16:23

englo
You have summed it up nicely.
Basically its all gone out of kilter since Lance had to stand down. I wonder what he thinks of the current situation!
Hard to believe but without the right person at the helm things can go badly wrong. Look at Man Utd!

[frog1] 23/1/2014 16:17

I have not seen the complete Numis note and no eps number. The part I saw just mentioned revenue of $39.9m and $60.4 m for 2015. These figures would correspond to just over 700mt this tear and around 1250 mt next.

Just using this and opex of $21 per kg and 400mt used by IOF chem gives around 7p eps as I showed yesterday. I was hoping someone might point out where any of the inputs I used was incorrect. The same model gives eps over 13p for 2015, but if they go to 2 shifts using 800 mt in IOF chemical that goes to 15.5p.

I assumes that the eps figures Numis came up with were just over 7p and just over 13p. Was that not the case?

[monts12] 23/1/2014 16:16

Festario
there is no doubt that the Numis note contains factually incorrect data which has misled people into selling, that was my point.

[superg1] 23/1/2014 16:15

Fest

Anybody that matters thinks a big mistake has been made. The same comments are buzzing around all over the place.

Plenty thought early on that something was wrong in them, but now a few seem to have clicked what it is.

[festario] 23/1/2014 16:11

Monts, as it stands, those who sold, (if any) in the mid 90's or high 80's can rebuy with little or no damage. But we are not CERTAIN that a mistake has been made, we only THINK it has.

If news had leaked that IOF will actually require a large upgrade, then I think that would have been reflected in the MM's marking us up late this afternoon, and they are not.
I shall sit tight. I always planned to buy no more shares until after the water news, and I see no reason to change that position.

[che7win] 23/1/2014 16:09

Whats $10m profit gap between friends.

[superg1] 23/1/2014 16:02

Monts

Don't forget all some look at is EPS with not a lot of interest in anything else, it is the key figure after all.

It sounds like Numis may have missed the main point and that's the opex cost they mention of $21 v the costs of iodine.

In other words they may have missed the 21 opex to the iodine price gap. Which in short ignores that profit, leaving just the chem div mark up.

It will come out in the wash if right, but by no means is it trivial, it would obviously make their TP wrong too.

[captain_kurt] 23/1/2014 15:57

With the GMP note out soon, we should be able to see the difference in both.

[engelo] 23/1/2014 15:57

If there is an error in the Numis figures then IOF should get their act together and show some initiative.

We can all be confident in IOF's unique business model, and hopeful about the future. But to be honest and sometimes for very good and understandable reasons the following have not gone well:

LB, I01, I02, I03, Towers for I04 et seq, Water, Dec RNS, Numis. That's a hell of a sequence.

It is pretty obvious that I04-6 are progressing well to the new schedule and it is high time that the feeling that 'nothing ever goes right here' is challenged head on by informing the market of progress asap.