“The group’s debt refinancing during the period was a key highlight and has greatly strengthened the balance sheet,” said Tom Becker, the president and chief executive officer of Iofina.
In its results statement covering 2020, the iodine producer confirmed that last year was a record-breaking one for the company while the first quarter of 2021 saw record revenues, partly as a result of the sale of excess inventory.
Revenue in 2020 rose to US$29.7mln from US$29.2mln in 2019, while profit before tax more than doubled to US$1.28mln from US$552,425.
Cash at the end of 2020 stood at US$3.5mln, compared to US$8.2mln at the end of 2019, following US$5.2mln of repayments as part of the group’s debt refinancing.
The refinancing of the debt during the year was a crucial milestone for the company and contributed to a 37.7% decline in finance expense to US$1.7mln from US$2.7mln the year before.
“The group’s debt refinancing during the period was a key highlight and has greatly strengthened the balance sheet, placing us in an excellent position to continue to make operational improvements and to expand our production and chemicals product portfolio. In line with our expansion strategy, IO#8 was completed on time and within budget during the period and we are now carefully reviewing several promising locations for expanding further, while carefully considering the timing around this,” said Tom Becker, the president and chief executive officer of Iofina.
The company said it now expects debt to be in the range of two to three times annual underlying earnings (EBITDA), with cash flow generation compounding and thus enabling the group to continue whittling away at its debt.
The group is now squarely focused on growing its current iodine production and chemical compounds while moving into new chemical compounds. The board is also considering strategies to reduce Iofina’s reliance on our current oil and gas partners.
Last year showed the importance of diversifying the company’s revenues, and this year the group plans to invest in a new production line to improve its largest non-iodine process to improve efficiencies, safety, and purity.
“Following a brief slowdown in the second half of the year as a result of the COVID-19 pandemic and its effects on the global economy, we have been particularly encouraged to see the strong state of the iodine market and its recovery in Q1’21, with prices having bounced back to roughly where they were this time last year. We are confident that this recovery will continue for the remainder of 2021 and beyond and we are pleased to be on track to continue our growth,” said Dr Becker.
Broker finnCap said delivering record results in 2020 was “no mean feat given the severe direct and indirect challenges thrown up by the pandemic”.
“It represents the fourth consecutive year of production, revenue and EBITDA growth, testament to management’s delivery of its turnaround strategy. With one of the lowest cost iodine production bases globally, a strong and diversified product portfolio, a significantly improved balance sheet and a strengthening iodine market, Iofina is well placed to be a major beneficiary of the global recovery from the pandemic,” finnCap said.
Shares in Iofina were up 3.1% at 11.75p in mid-morning trading.
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