Iofina (LSE:IOF) — Preliminary results for the twelve months ended 31 December 2024,

0:00 Good afternoon, and welcome to the IOFINA PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time by the q and a tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question that you received during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. And then I'd like to hand you over to Tom Becker, CEO. Good afternoon, sir.

0:32 Thank you very much, and welcome, everybody. I'm Tom Becker, CEO of IOFINA, alongside Malcolm Lewin, our CFO. And on behalf of our board and our employees, we welcome everybody to this update in May 2025 on IOFINA and its happenings. I want to give a brief indication of what we'll be covering in today's presentation, which includes a general company overview. Not everyone is totally familiar with IOFINA and its workings that are on this particular presentation. So we'll give some background of the company, its history, what we do and why we do it. We just announced our fiscal year twenty twenty four results earlier this week. We'll go through those a bit in detail and then really get into the meat of the presentation, and that is what we our business units, what we do, a general idea of the out end market and its, health and growth and the growth plans that we have as an organization that we've been executing over the last number of years are gonna continue to execute here moving forward.

1:37 Before I get too involved in the presentation, I'll remind everyone of the legal disclaimer and the, forward looking statements, so please review this, policy at your discretion. To give everyone an idea of what IOFINA is and what IOFINA does is that we are a specialty chemical company, based in The United States with all operations. We specialize in halogen based chemistries with an emphasis on iodine based chemistries, but we also deal with, chloro and fluorobase chemistries, other halogens that are in the same group as iodine with similar chemistry sets. We have two business units in The United States, IOFINA Chemical and IOFINA Resources. IOFINA Resources is the iodine production part of our operations.

2:26 It has iodine extraction plants using our unique technology in the state of Oklahoma with seven operating plants currently commissioned. We utilize waste brine water from oil and gas fields. So when oil and gas comes up in their production, a lot of brine water also comes up in the production, and it's a waste product for these companies. We've developed a geological model to identify where commercially available iodine is in these brine streams and have built seven plants that are operating in North in the state of Oklahoma to gather iodine using our unique iZORB technology. And we have an eighth plant under construction right now. We generated over 630 metric tons of iodine last year, and we're the second largest producer in North America and the only one with growing iodine production.

3:20 The iodine market's a unique growing niche market with some specific demands that continue to grow. And currently, demand for iodine is, is out outpacing supply. So we're in a good position as a iodine derivative may or as an iodine producer. We also have vertical integration of our iodine into iodine specialty products, and that's where our IOFINA chemical business use unit comes into play. So the the iodine that's created at IOFINA Resources is pushed into IOFINA Chemical located in the state of Kentucky, produces value added compounds from the iodine as well as some chloro and fluorobase derivatives, but also sells the group's iodine directly around the world. So these are our general business units. We're executing our growth strategy as we move forward, which we'll get into a little bit more in the presentation.

4:14 And that resulted in another record revenue in fiscal year twenty twenty four and off to a good start in 2025. Why is IOFINA unique? We're an iodine producer. We have unique technology that allows us to, as I alluded to a little bit before, take a waste product from oil and gas operations. These brinewaters that are coproduced from the from the hydrocarbons, in state of Oklahoma are separated out by our partners. So we partner with oil and gas companies, which are currently disposing of the water and saltwater disposal sites. We partner with them to take use our technology, build plants at water at sites where the water congregates. So we see large volumes of water. We borrow the water from our partners, put it through our unique technology, and isolate iodine before we give them back the iodine extracted brine.

5:15 We believe we have a unique business model. We're using a waste product. We're more environmentally friendly in our opinion than other producers of iodine around the world. And this technology allows us to take these, what I would say, dirtier kind of brinewaters. They're not totally cleaned out and still produce a high quality iodine product using our iZOBE technology. We're not new to this business. We've been creating commercially available iodine for over a decade now, and we have seven plants in operation. We're an established profitable company with

5:49 well well defined technology, and we continue to grow our operations in The United States. And in order to do that, we have a unique geological model to allow for us to know where iodine in brines that are commercially concentrated concentration levels, which are allow us to commercially, economically extract the iodine from. We know where those are, and we have are exploring for additional opportunities to build new plants, not only in our core areas of Oklahoma, but beyond those kind of current locations that we're at. We're able to build these plants quickly along our partners' saltwater disposal networks, and we vertically integrate those into that item that we produce into products that go into derivatives that we produce at IOFINA Chemical as well as around the world where we sell our iodine into different applications.

6:49 Just to review a little bit of where we've been in 2024, we're executing our plans. Another record year of revenue of, you know, $54,500,000, which is about 9% higher year over year, pushing our iodine through the IOFINA chemical plant, where 46,000,000 46,700,000 of our sales are through iodine and iodine derivatives, but there's also a component of non iodine based sales of almost $8,000,000 last year. Record iodine production of over six thirty four metric tons, 13% higher year on year, and our balance sheet is strong. We have a strong cash position at the end of the year of $6,800,000 in cash.

7:39 Net cash, which subtracts the debt from the cash that we have on our books, is a net positive position of almost $3,000,000 and is up year on year. Some other accomplishments in 2024 include, the bringing online of our IO plant, IO Number 10 in September 2024 and also in the same month, agreeing to commercialize terms for IO 11, which began construction before the end of the year and will be online here shortly in the first half of Q3 of twenty twenty five. So we continue to execute our growth plans to build new iodine IOF plants and expand our iodine production. The iodine market is is strong.

8:25 Iodine spot prices surpassed $70 a kilo by year end in 2024. And, second half of twenty twenty four, our average item price sales are greater than the first half of twenty twenty four and continue to be strong into 2025. We do have a credit line, a loan facility of up to $10,000,000 for investment opportunities for such projects like future iZOR plants. So we make sure that we are properly funded to be able to execute our growth plans. We in 2024, we signed the new brine water agreements with two for two existing iZOR plants at the beginning of the year, which allows for some more normalized royalty agreements with that particular partner and some more long term stability of water coming to those particular plants.

9:18 Now the other thing I wanna emphasize is that, you know, we are a specialty chemical company. We handle hazardous materials. Our workforce is well trained. They are have a focus on safety. We're very proud to say that we've had those lost time incidents over the last four years, which is a proud accomplishment for us. We don't sit on our hands based on that kind of accomplishment. We're always trying to continually improve our safety systems. And as a specialty chemical company, we are committed to the safety of our employees and our communities as we produce the products that we sell around the world. Just a brief financial highlight before I throw it over to our CFO, Malcolm.

10:06 Year over year revenues were up. You can see in the chart that we continue to grow our revenues. EBITDA was slightly down in the year based on some additional royalty payments due to our agreements with brine supply partners and some end of the year kind of delayed sales that weren't weren't recognized in 2024, but will be recognized in 2025. Net cash is in a good position, and I'll leave it to Malcolm here to go through a little bit more of the details of the financials that we just announced for 2024 earlier this week. Malcolm? Okay. Thank you, Tom. So running through our profit and loss account, our sales were $54,500,000 as Tom's already alluded to, and that was 9% up on $50,000,000 for 2023.

10:59 Within that $54,500,000 we showed $46,700,000,000 as relating to sales of iodine and iodine related products. So breaking that down further, we actually had $24,700,000 which was down to sales of raw iodine. That was four twenty three metric tons of our six thirty four metric tons of total iodine production. And that amount of sales was pretty much a mirror image of what we'd had in the previous year when we also four twenty three metric tons of raw iodine, and the pricing was very similar between the two years. On a 100% basis, we averaged $68.60 per kilo for our 2024 sales as opposed to $69.19 for our 23.

11:54 So very similar result there between the two years. The increase in sales were primarily driven by sales of iodine derivatives. So going back to that 46.7, we've accounted for 24.7 as being raw iodine. There's now 16.9 in addition, which is down to what we refer to as derivatives. So that is principally chemical compounds that are made by taking the iodine that we produced, adding other chemicals and performing various reactions. And out of that comes a stable of what we call iodine derivatives. And that those increased very satisfactorily to $16,900,000 of turnover for 2024 as opposed to 12,900,000 for the previous year. So that was an increase of 31%.

12:49 And in fact, two of our flagship products within that category pretty much doubled their sales as of over the previous year. Our non iodine sales, you can see there, 7.8 compared to 8.1 for the previous year. They were down a bit. We had a bit of a bit about a 5% volume reduction in orders during the year a key product there, but we believe that that's kind of stabilized, and we'll be back to somewhat higher levels during the current year. Moving on down.

13:26 Gross profit, you can see, fell from 15.6% to 13.2%, which is, to be frank, not insignificant drop. And Tom's already referred to a key factor that was behind that, namely that we renegotiated the terms of our royalty agreements with a particular oil and gas supplier to us, and that that supplier actually provides us with brine water for two of our plants. And that was quite a substantial adjustment, and that was the biggest reason why gross profit number has come down. There are also some increases in production costs as regards in payroll inflation and also chemical costs, which have risen not insignificantly over recent years, though we believe, at this point, that they are much more stable going forward.

14:28 Moving on down. We have administrative expenses of GBP 5,700,000 versus GBP 4,800,000 the previous year. Again, that's a not inconsiderable increase of GBP 900,000, and that is reflects some hires that we've made a couple at quite senior levels to cope with the expansion of our business. We've taken on an extra sales manager. We've also, well, in fact, rehired a project manager who was with us previously and has come back to us. And in addition to the personnel side of things, we've also invested money in upgrading quite significantly our web presence with a view to making our site more attractive and effective in terms of getting potential customers to engage with us.

15:22 So the net of those numbers brings us down to an adjusted EBITDA of $7,600,000 versus 10,800,000 the previous year. And then down below that, we have depreciation of $2.6 which is up on the previous year, 2,200,000. And the reason for that is, of course, very simply that we are build we continue to build plants and invest in equipment and machinery. And in particular, we brought on IOF10, our latest IOF10 plant in October 24, and we had brought on our IO 9 plant in the middle of two thousand and twenty three. So we were taking a full year's depreciation rather than just six months for that plant. Going on down, we get to operating profit of 5,000,000 versus 8,600,000 the previous year, profit before tax of $4,800,000 And then we have a current deferred tax number of $1,900,000 which is quite a sizable number in relation to our profit before tax. But in point of fact, out of that $1,900,000 $700,000 is the amount of tax that we actually paid in respect of 2024.

16:33 And $1,200,000 is an adjustment for deferred tax, which is a noncash item, and we don't expect that to recur going forward in the same fashion. I should also add that the 700,000 that we paid did include a reduction of about 800,000 because we have, for several years now, been tax light by virtue of losses made in previous years, but those losses have now run out bar a couple of 100,000 going forward into 2025. So the amount of tax actually payable will increase over time. So profit after tax, 2.9%. Earnings per share, 1.5% versus 3.4% previous year.

17:23 Okay. Can we move okay. So moving to the balance sheet. Property, plant and equipment, up from 24.8% to 31.8, and that's very simply the amount of capital expenditure that we incurred during the period, and we'll come back to that when we get to the to the cash flow, less the depreciation. Nothing exceptional there. Going on down inventories are very similar to the previous year. We think we have those under pretty steady control. Receivables at the end of twenty three were, shall we say, a bit abnormally high at 15.5, but those have come back to 11.9 at the end of twenty four in spite of the fact that the sales are up. So and I think that that '24 number is a kind of normalized one. Not much change in payables. Our bank debt, $3,900,000 from $53,000,003,900,000 dollars is the residue from a $10,000,000 loan that we took out when we did a refinancing back in September 2020.

18:22 We're paying off at the rate of $1,400,000 a year. So we have a little over two point five years left before we are clear of that item. Cash, 6,900,000. So our net cash, 2,900,000, which is an improvement over 1,200,000 for the previous year. Deferred tax was generated by the adjustment I talked about just now. So it brought us to net assets of 47,800,000 or $0.25 a share compared to 44,800,000 of net assets for the previous year. Cash flow was turned out pretty well for us in 2024. So if we start from EBITDA of 7.6, we've got a very positive effect there for working capital changes, although, in fact, that relates not insignificantly to that reduction of receivables that we saw on the previous slide in the balance sheet. So that I would say that, that is not an item that we'd expect to recur in that positive fashion going forward because more sales we have and we shall as time goes by, the more we are likely to have tied up in, ultimately, in inventory and receivables, and that doesn't work positively. It's quite likely to work a little bit the other way. We paid $900,000 of tax, but, said earlier that we had a bill of 700. We we're we're actually reclaiming our tax advisers are reclaiming a couple of 100,000 for us for for various reasons.

19:54 So our operate operating cash, 11,500,000 positive. Our CapEx was $9,500,000 That $9,500,000 breaks down as between $5,800,000 on our newest IOF 10 plant payment operation in October 24. There's about 1,700,000 pounds on other iodine production plants because they need maintenance CapEx in some cases. And in other cases, also, there are improvements or upgrades that it makes sense on a to to actually do looking at the sort of payback that that that we can get from doing those.

20:40 Finally, there was $2,000,000 that went into our IOFINA chemical, our chemical plant. And a not insignificant proportion of that was related to the new animal feed product that Tom, I think, talked about or he's going to talk about already.

21:02 Repayment of debt, I mentioned earlier that we're paying back 1,400,000 a year on the bank loans. So our net cash inflow is 0.3, and it left us the end of the period with 6.9, which we feel is a pretty good result. All right. Thanks, Malcolm. I'm going to switch gears a little bit in the presentation now and just kind of go through what are the happenings that the individual business units of IOFINA. IOFINA Resources, namely the iodine production unit and IOFINA chemical, the unit that sells the iodine and creates value added derivatives. And you can see from the chart on this particular slide is that we're proud to continually grow our iodine production. We produced six thirty four metric tons of our crystalline iodine in 2024.

21:49 That's a record for us as an organization. As IO-ten became operational in the year, we had a full year of IO-nine operation, and we have seven iZOR plants operating at the end of the year and currently today. There is an eight iZOR plant, IO 11, which most of you are familiar with, that will be online now, we believe, in the first half of Q3 twenty twenty five. This will be our third plant that we will have built in the last three years. So we are committed as an organization to continue to invest in growth of our item production operations. You can see our item production in 'twenty two, 'twenty three and 'twenty four have steady growth with IO number 10 online for a full year in 2025.

22:34 IO 11 coming online too, you're gonna see growth in our item production in fiscal year twenty twenty five as well with an expectation of about 300 metric tonnes produced in the first half of twenty twenty five, which is a significant increase year on year from 2024 production. As Malcolm mentioned, we have, for the IOFINA resource unit, spent about $7,500,000 primarily for the new iZORB plant, IO 10, and a little bit of a push at the end of the year for IO 11. We are continually excess assessing our item producing facilities and water chemistries for not only our current locations, but for future locations.

23:22 And as I mentioned earlier about the safety aspect of the group, the IOFINA resource division, which operates these plants twenty four hours a day, seven days a week, every day over the year, We're very proud of our safety record of these particular facilities. To get a little bit more in-depth into

23:42 the new plants that we have just put online and what's going to be happening here a little bit, Item number tents opened up in September 2024. We now have what we call two core areas of our item production in the state of Oklahoma. One is our Northwest Oklahoma core area, which contains five production facilities, which are our plants that have been in operations the longest. And we've built IO Number 9, IO Number 10, and are building IO Number 11 in a new core area that we that is more in the Central Oklahoma area. So IOF 10 is in this particular area. It's a it's about a four sorry. A $5,400,000 facility to build with a production of over a 100 metric tons per year. And once it's come online, it's been operating well for us as a unit.

24:39 In order to facilitate our growth plans and talked about, you know, three plants in three years and future plants down the road, we've rehired a key employee, as Malcolm mentioned, to lead our construction unit and the development of these plants to ensure that these plants are built properly within budget and online as soon as possible. Item number 10 is also with a new brine supply partner. We have currently seven plants in operation right now, five different brine supply partners. So we have diversity in our locations. We have diversity in our brine supply partners, and it just shows that, you know, IOFINA is moving in the right direction that we are able to secure our partnership agreements with multiple different oil and gas companies, which bodes well for our growth opportunities in the future.

25:32 Our our technology is established. We have a positive reputation in the oil and gas community, and that's only a positive for future growth for IOFINA moving forward. Ion 11, under construction, will be online in the first half of Q3. This agreement was signed in the fall of twenty twenty four. Same core areas nine and ten, expected to produce about a 100 metric tons of our crystalline iron per year. Spend a little bit of money in 2024, but the vast majority of the money will be spent in 2025. Should come in line similarly to the cost of the IO number 10 unit. And this is actually with a current supply brine supplier for two of our plants in our Northwest Oklahoma region. So this is a this is a supplier that operates in the Central Oklahoma area, oil and gas operations.

26:27 Felt very good about working with IOFINA, and we're able to come to a commercial agreement for a new plant in a new location.

26:38 Turning to IOFINA Chemical a bit. All the sales of, IOFINA, the company are pushed through IOFINA Chemical. So every bit of iodine that goes, out of the IOFINA resource division comes through IOFINA Chemical, and it's either used for iodine based derivatives or sold as as crystalline iodine to companies around the world. Our we are proud that we are we have continued to put an emphasis on the use of iodine in these specialty chemical derivatives. And in 2024, there's a significant increase in the amount of iodine that went through iodine derivatives, derivatives, a 31% year on year increase. And in fact, if you look at our crystalline iodine sales, which Malcolm may have mentioned earlier, the crystalline iodine sales from 2023 to 2024 were essentially flat.

27:33 But our our growth in our ion production, most of that was pushed through IOFINA chemical. Two particular derivatives that we produce, hydrolic acid and a compound that we refer to as IPVC, performed particularly well in 2024 driven by small demand in agricultural applications for hydrolic acid. Hydroacid also has some industrial catalysis uses, And IPVC is a biocide that is a is a additive to paints and coatings. It also acts as a preservative for some other personal care products to prevent mold and mildew from growing in these type of fluids. IOFINA Chemicals continues to invest in r and d opportunities.

28:21 Sales team and management team look for and meet with customers and potential customers to identify future iodine based derivatives, and our r and d team works on commercial development of these derivatives. Early in 2025, we started producing a new compound for IOFINA chemical. It's an added it's a animal feed additive that uses its iodine based feed additive like humans, which need a certain amount of iodine in their diet to control thyroid function and and for, children to grow healthy. Animals with, that have a certain amount of iodine intake grow bigger and better. And so, we are now producing and using multiple metric tons of iodine per month into a new product that's an animal feed additive produced by IOFINA chemical.

29:15 We also produce some non iodine based derivatives, and likely the biggest component of that now and in the future will be, especially chemical gas that goes into the semiconductor industry. We have invested in, our sales team and our website, which we'll talk about here a little bit further. And likewise with IOFINA resources, our safety and our customer satisfaction and our metrics for our internal thing, we're very proud that we are meeting our expectations. Since IOFINA Chemical was a sales unit for the the business, the reputation of IOFINA, the products that we have, meeting customer, demands is an important component for us.

30:02 We follow those kind of trends in our, in our business to make sure we are executing things properly. And I'm proud to say that we are continuing to improve in those particular areas and are meeting, or exceeding customer demands.

30:20 Moving on a little bit to, you know, what are we doing a little bit differently from a sales aspect. One of the reasons why we push all of our sales through IOFINA Chemical is it's it's an established business. It's been in the iodine world since 1983, selling products worldwide of iodine and halogenated chlorofluorobase derivatives. In order to identify new products, I've already talked about our our sales team and our and our management team being out there talking with other people and improving websites in order to identify new product opportunities for the group. We've invested in our website, as Malcolm has mentioned.

31:05 We attend trade shows in a more traditional way to meet one on one with people. We've improved our education to the market via social media means. But I think the one thing I will emphasize is that our view as our website is that, you know, traditionally, trade shows meeting face to face provided business leaders opportunities to exchange ideas and create partnerships. We view our website as a daily trade show, an opportunity for us to, sell our products, tell about what's unique about IOFINA, how we can help other people, and and provide that initial communication between us and potential customers down the road. It's an important aspect for us to continue to expand our sales of our products to new customers and new regions.

31:55 As we continue to grow our IOFINA resource iodine production, we will need to continually to grow the avenues that we push our iodine or iodine derivatives into the market. And we've been successful in growing, expanding our sales into Europe and The UK over 2024. To that, we are not a large company, and we do not have international reach. We do not have operations, internationally around the world. So we do rely on relationships with agents and distribution networks in certain areas of the world in order to get that reach into other areas that are more and more difficult for us to directly communicate with.

32:44 If you've been with an IOFINA presentation before, this slide is probably fairly familiar to everyone. It gives a little bit of an overview into the iDEN market, which it's pretty niche market. Availability of information is not readily available, but just an overview of the iDEN market and the graph on the right. The graph on the right kinda shows two particular pieces of information, historic kind of production, world iodine production, which is essentially equal to kind of demand for iodine and and iodine based products. And the iodine price in a 100% basis per kilo is the yellow line on the on the on the chart and the y axis on the right.

33:29 And, what you can see is there's been a steady growth in the iodine market over the course of time, generally at or near GDP kind of levels. But in particular, in 2024, the iodine market grew at a faster rate than that. We estimate about a seven to 8% rate global iodine market growth, and we're probably near a global iodine tonnage usage of about 39,000 metric tons of iodine use worldwide in 2024. Really spurred on mainly by increases in use in human health care activities, especially contrast media agents that use iodine to enhance visibility on certain CD scans and X rays.

34:16 Most of the world's iodine is produced in Chile. They use a hard rock mining operation, in the Atacama Desert. The rest of the world's iodine, about, 30 to 35% are created in Japan, USA, and other countries from brine water. What's unique about IOFINA is that, again, we are using brine streams that are already coproduced. It's a resource that's already coming up out of the ground. And without IOFINA's technology, no one would be isolating that iodine. It would just simply be wasted. Wasted. The the iodine market spot price over the last few years has been steady in a range which we believe is likely to be the new normal kind of range in in the foreseeable future between the mid sixties and, over $70 a kilo. And as I think we've mentioned earlier in the presentation, during fiscal year twenty twenty four, hydropower prices in the second half of the year rose with compared to the first half of the year, and we've seen that trend of hydropower prices over $70 a kilo early into 2025.

35:26 We do expect these prices to remain at similar levels in 2025. The item market is expected to grow year on year, and there's no indication of any real significant additions to supply coming online in 2025. Moving on to the end of our presentation, we wanna talk about, you know, where we're going here as an organization. We've really focused on, as you can identify from the talk about, iron and production plants, and that's where most of our capital expenditures are going towards is building these new plants. We intend to double our iron production from just over 500 tons in at the end of twenty twenty one, which is about the same level we were in 2022 to double those in the in the near future. And how are we doing that? We're executing our growth plans. We're investing in the IOFINA resource division.

36:24 Our IOFINA resource staff have done a great job of identifying opportunities for us to build these plants, and now we're building them with IOFINA operational last year, IOFINA coming online soon. And as we mentioned in our our number of press releases here moving forward, negotiations for a new iodine plant, iodine Number 12, are going well. We do expect that plant to be under construction before year end of twenty twenty five. Not only that, on our iodine production standpoint, we continue to invest in our, iodine and chemical division and the r and d efforts to create new compounds. As part of our growth strategy, I o 12 and beyond of our iodine production, we we continue to evaluate opportunities in new core in new areas. So we've we've we've have two core areas in Oklahoma in Northwest And Central Oklahoma.

37:17 We have opportunities to continue to grow our item production there, but there's other opportunities in other areas in The United States that could provide a step change for our iodine growth here in the future. We we add on to our sales and marketing aspect. We've hired personnel to help us with our sourcing of raw materials. We continue to develop new products at IOFINA Chemical to diversify our product mix and our and our customers that we sell to, and we have facilities for in place for future growth opportunities. So each of these either production plants, the last two plants are gonna probably come in between 5 and $5,500,000 to build a plant. In order to keep building these plants, we wanna ensure that we have the credit facilities in place to continue our expansion, and we have, in 2024, extended and increased our CapEx loan facility. We have not gotten into this loan facility at this particular time, but it's likely we will be slowly drawing on that facility as we build new plants in the future.

38:40 And lastly, before we move to question and answers, I just want to kind of give an outlook of how we view things in the near term and essentially in the long term. We are consistently growing our iodine production. We're forecast to produce about 300 metric tons in the first half of this year. We continue to see strong demand in the iodine market from established customers, especially in US and Asian base, but we're growing those sales opportunities in other regions around the world that we're kinda light in our sales compared to the global iodine market. IO eleven is on track to be operational in second half of the year and is likely to produce about, on an annualized basis, about a 100 metric tons per year of production.

39:27 As I mentioned earlier, IO 12 discussions are progressing well. It's expected that that plant will be under construction before year end, and we're looking at areas outside of our current core areas in Oklahoma for either I o 12 or an I o 13 plant as we look to build plants in the future. We're in a market that is, a strong growing island market in which, you know, supply is fairly stable, but demand continues to increase. And that is only a positive for an iodine producer like IOFINA. We aspire to be the largest iodine producer in North America in the coming years. And I think from a from a just an overall view as a company, we've accomplished over the last five years a number of different things for the for the group. We continue to be a profitable organization.

40:22 We have demonstrated that through the diversity of our plants and the agreements that we've made for new IOFINA plants that we are a good partner for oil and gas companies. And we, as a management team and as a board, are committed to continue to grow IOFINA as a group and especially the IOFINA resource iodine production over the next number of years. And I appreciate I wanna thank everyone for attending this presentation. We'll move on to question and answers soon. I really wanted to, say a big thank you to, the investors in IOFINA. We appreciate your investment. We're working hard to create value for you and expand the organization in a prudent manner.

41:10 And for that, I'll throw it back to our IMC team in order to get ready for the question and answer portion of this presentation. Tom, Malcolm, thank you very much for your presentation this afternoon. And if I just bring back up your camera. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab situated on the top right hand corner of your screen. Just while the company take a few moments to review those questions submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via investor dashboard. Tom Malcolm, as you can see, we have received a number of questions throughout today's presentation. And if I could just hand back to you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end. Yeah. So we will go through the questions. I'll be reading them from my screen here a little bit and trying to answer them the best we can. If there's a question that hasn't been answered or we cannot answer, we'll we'll indicate that as well. So just kind of getting into the questions.

42:11 First question we have has to do with the falling exchange rate of the US dollar. Is the falling is the US Dollar value exchange rate impacting profits, and have you made any good further long term brine supply agreements? So the quick answer to the exchange rate is, the only real effect that we have as an organization on exchange rate is the cost of us being public in The UK, so the PLC related expenses. So there's a minor, impact on the costs for PLC because of the exchange rate. Otherwise, all of our transactions almost to maybe some small exceptions, but almost to a t are done in US dollars. So there's really no effect on the change in exchange rate from other currencies.

43:00 With respect to, any good further long term brine supply agreements, there's really no other changes that would have been made to the existing brine contracts other than what we've talked about with the renegotiation of the one with the one brine supply partner at two of our plants. We have good relationships with our brine supply partners. We've we've developed new contracts for IO number 10 and IO number 11. And just to show the how those relationships are, you know, IO number 11 contract is with a, a current supplier at two of our legacy plants under very similar terms. Second question is the decline in oil prices affecting the company and its agreements with the oil and gas companies.

43:48 Really, oil prices don't have any effect on the agreements that we have with the oil and gas companies. We've seen no immediate effect on supply. What a significantly lower oil or gas price could mean on our operations, if if things move significantly lower, that could potentially slow down production in oil and gas. And if oil and gas production slows down, that could negatively affect us. In my opinion, it would take a pretty steep climb for us to see any kind of material changes there. Third question is you're willing to look outside your established core area in Oklahoma to enhance opportunities to establish greater production from your plants? I think we've referred to that in the presentation already that, yes, we are looking at, other opportunities outside of our Oklahoma core area.

44:39 If you look at our annual report, we mentioned those kind of opportunities as well. Number four, had the Trump tariff saga created any issues with your pricing model and your customers outside of The US? Are you confident this will not affect the company's ability to sustain a loyal customer base? Frankly, if I knew exactly what was going on with the The US tariff and the policy, I would be in a much better position, but everybody I've talked to seems to be a little bit unclear of the strategies of US tariffs. That being said, there's no material effect currently that we've seen from US tariffs one way or the other. There's been some minor changes in supply chains that we've had to try to implement. We do do a little bit of supplying from China, but we've tried to move away from China supply for a number of years because tariff have already written risen from supply risen from China back in the first Trump administration were carried on through the Biden administration as well.

45:41 But we're not seeing any kind of material effect from tariffs. These things are ever changing, and, we are selling our materials globally. Currently, we are not having any kind of negative effects on our global sales due to any kind of retaliatory tariffs from other countries. So all in all, tariffs have been a a minor factor for us, but nothing material. As you can imagine, everybody's, looking at tariffs in The US policy day to day, and things could change moving forward. Another question is we see that there have been a shift to iodine derivative sales in latest results. Can you explain how this occurred, and can we expect this trend to continue? Are you able to develop are you able to go into more detail about the products your IOFINA chemical is looking into develop?

46:35 I guess what I can say is we've already talked about a 31% year on year growth, particular hydronic acid and IPVC being significant growth year over year. Demand for derivatives that we make can change year on year. We will continue to sell the products that we make at IOFINA Chemical as long as demand increases and historical margins can be met. If we're if we have opportunities for our particular products at historical margins, we will continue to expand those. And we're looking for other ways like the animal feed additive to push more iodine through IOFINA chemical.

47:21 As we view our business and our iron production continues to grow, we are, as a company, striving to keep the percentage of iron that goes through IOFINA chemical essentially at the same rate as we do now. So as our iodine production continues to grow, we're hopeful that we can continue to grow our iodine derivatives products at the same kind of percentage rate as our iodine production moving forward. Trying to get to a few more questions here before we run out of time. Are there any developments in your iZORB technology since you last communicated to the market that will help expand production levels. Our technology, it's a pretty established technology.

48:10 We've we've been commercial producers of iodine for over a decade now. We continue to adjust in small bits our process to become more efficient, and we continue to look at opportunities in order for our plants to be even bigger and better. So as you look into future plants of IO 12 and IO 13 and beyond, we're looking at other avenues that will allow our technology to take on larger volumes of brine supply. Can you provide a further breakdown of your CapEx levels between cash and debt? Are we expected levels expecting levels to rise again, and will your cash generation levels be able to cover your CapEx?

49:01 I guess the answer to that is we have a $10,000,000 debt facility in place. And depending on how fast we build our plants will depend on how much we can use cash to build new plants or whether we not we need to get into the debt facilities. We are building plants at a more rapid pace in the in that we have in the past. So it is a likely expectation that we will be drawing on a portion of the $10,000,000 debt facility as we build plants in a more aggressive manner than we have earlier in the decade. Another question is a growth prospect as a growth prospect prospective cash converting and generating company, share price is not reflective like it should be. Why do you think the market has not reflected the growth opportunity? Do you think the next step to getting share price moving upwards with the company seeing what do you what do you think the share next step is to get the share price moving upward?

50:04 The quick answer is yes. We feel we're undervalued. If you look at the profits that we're generating and the the valuation that we have in as an organization with our peers, we we feel we're undervalued. It's up to Malcolm and myself, our board of directors, and our employees to keep executing our business plans and keep growing the business, keep communicating the story of IOFINA, why we're unique, and why we if you look at the next few years, it's a pretty exciting opportunity for us as we build new new plants to keep telling that story to new investors. We're bringing new investors into the shares. As you can see in some of the releases recently that there's been a new significant investor come on board, and it's up to us, our broker, our our sales team to continue to tell the unique story of IOFINA and for us to keep executing on the growth plans like IO number 12 and beyond to try to drive shareholder value.

51:12 As we finish up here, is there any intention to offer long term holders and benefits, in the form of a maiden dividend or share buyback? The quick answer is, there's no immediate plans to, offer a dividend or buyback, but we wanna have the ability to do that. And if we I would encourage investors and the board is is, encouraging investors to, vote, yes on the resolutions of the AGM, which will allow us the opportunity to do the invest to do, buybacks or dividends in the future. That being said, the cash that we are generating as an organization, currently is being reinvested into growth opportunities, but we wanna have the flexibility for when the right time for a dividend or buyback is is warranted, the ability to do that.

52:15 Just to finish up, are you happy with the spot price at the moment? Is there a scenario that's price is too high, or do you always have a demand for your products and that's the higher price, the better it is for profitability? I think the quick answer to that is we're happy that item prices are where they are. The industries that goes into have now been normalized to these prices in the mid sixties to mid seventies per kilo. As an iodine producer, we benefit higher the price benefits us. That being said, if there was a huge spike increase in the iodine price, it may not be good for the iodine market.

53:04 While it may have some short term benefits and profitability, it could generate some substitution of products in certain applications. So for us, a steady increase in item price over the long longer term period of time is probably more advantageous to any kind of spike in the market. But I think the item price currently in the marketplace is at a good level and is with the demand increasing in the item world is likely to remain at these levels or higher moving forward. I know there were some questions that were posed during the during the presentation today, but I think we're running out of time here. We'd be happy to work with the IMC team to provide answers to those questions that were submitted during the presentation.

53:57 Again, I'd like to thank everyone for attending the presentation on behalf of Malcolm and myself, our board of directors and our employees. We appreciate your time today. And for those investors into IOFINA, we appreciate your investment in IOFINA as a group. And I'll throw it back to the IMC team now. Tom, Malcolm, thank you for updating investors today. Can I please ask investors not to close the session as you'll now be automatically redirected to provide your feedback in order that our management team can better understand your views and expectations? This may only take a few moments to complete, and I'm sure be greatly valued by the company. On behalf of the management team of IOFINA PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.