AIM-quoted iodine producer Iofina (LON: IOF) has confirmed that development of the new iodine plant IO#10 is progressing, and it has signed a new brine supplier.
US-based Iofina is building the new plant next to the recently opened IO#9 plant. The new plant should increase capacity to 750 tons. The timing of the start of production has not been confirmed.
Iodine prices remain strong due to strong medical demand and the lack of additional supply. Cash generated from operations should fund the new plant construction.
Canaccord Genuity is maintaining its 2023 pre-tax profit forecast at $9.8m, up from $9.3m in 2022, while the 2024 estimate is $10.7m. The 2023 earnings estimate is 3.8 cents/share, rising to 4.2 cents/share next year.
The forecasts are based on an iodine price of $65/kg, falling to $55/kg in the second half of 2024, which is below the current price. Each additional $1/kg adds $300,000 to EBITDA.
The share price fell 1% to 24p, continuing a decline that has been going on since the summer. The 2023 prospective multiple is eight, falling to seven next year. Net cash should reach $1.9m at the end of 2023.