Iofina PLC on Tuesday predicted a fall in financial 2024 profit as higher fees in contracts for essential brine water supplies hurt forecasts.
The Colorado, US-based iodine producer signed new multi-year agreements with existing oil & gas partners for the supply of brine water to two of its existing iodine plants. These new contracts carry higher fees than previous arrangements and were effective from January 1.
Iofina shares were down 13% to 21.00 pence each in London on Tuesday afternoon.
Iofina predicted the higher fees would hurt earnings before interest, taxation, depreciation and amortisation.
The company changed its 2024 Ebitda forecast to between $8.5 million and $9.0 million, which at worst, would represent a 21% drop on 2023’s $10.8 million.
However, Iofina remains optimistic, adding: ‘Demand for Iofina’s iodine remained strong throughout the period and was supported by a further expansion in the customer base.’
The company reported a production of 124 metric tonnes of crystalline iodine, an increase of 16% from the 107MT reported for the first quarter of 2023.
Iofina said its newest IO#10 plant construction was ‘on track’ and ‘progressing well’ in its first quarter update. Dirt and concrete work are completed and major components such as the tower system have been ordered.
Iofina President & Chief Executive Officer Tom Becker said: ‘The group has made a strong start to the year across its operations. We have experienced consistent iodine production with output meeting our targeted range and demand for our products continues to be strong. The construction of IO#10 is also on track and is expected to be completed in the third quarter of 2024 on the current trajectory.
‘It is important to have signed new agreements with our partner and secured future water supply to two IOsorb plants. Guaranteeing this security means that Iofina can continue its future growth plans with confidence in our partners and focus on the development of new plants and products.’
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