Iofina (LSE:IOF) — Final Results for the 12 months to 31 December 2020

0:02 Good afternoon, ladies and gentlemen, and welcome to the IOFINA final results investor presentation for the period to twelve months to the 12/31/2020. Throughout this presentation, investors will be in listen only mode. Questions are encouraged, can be submitted at any time via the Q and A tab just situated on the right hand corner of your screen. Please just simply type in your question and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your Investor Meet company dashboard, and we will send you an e mail to notify you when they're ready for your review. I'd also like to remind you that this presentation is being recorded. Before we begin, we would like to submit the following poll. And if you would give that your kind attention, we would be most grateful.

0:49 And I'd now like to hand over to Tom Becker, CEO and Malcolm Lewin, CFO from IOFINA. Good afternoon to you both.

0:56 Thanks, Mark. Appreciate it. And welcome to presentation here that was gonna review our financials from 2020, our year 2020, and give it a bit of an outlook for 2021 of IOFINA. I'd like to welcome all current shareholders. We appreciate your support. And to all the attendees to the meeting here that are new to IOFINA, welcome as well. Hope to give both groups, you know, a bit of a background of what IOFINA is and then dive into the details of our 2020 and what our outlook is here moving forward. With me today is, our CFO, Malcolm Lewin, and Malcolm, you'll hear from when, we get to a deeper dive into the financial part of the of the presentation. But I guess, you know, I just wanna start off with today that I'm excited to be able to talk with everyone today.

1:46 And I I think that as you see in the presentation, I feel that IOFINA has never been better positioned in the history of the company. And I hope that that message comes across as we look at IOFINA in 2020, 2021, and moving forward. So as we move throughout the presentation, I do want to, quickly,

2:12 remind people of this disclaimer slide and take a look at it and that all aspects of the presentation, both oral So I'm sorry to to cut across. We're we're just losing a little bit of the volume on your on your microphone. Could I just ask you to? Yeah. I'll try to I just lost a little bit of distance from sounds like you've gone into the the back of the room. Okay. Can you hear me better now, Mark?

2:46 It's it's still pretty low, Tom. Is there any apologies to to the attendees. If I could just ask you, Tom, just to just check your settings there on the on the PC. I'm trying to do the best I can, Mark. I'll just is this any better?

3:07 Just just carry on a second for me, Tom, and I will jump back in. If not, I've got a dial in number for you to dial in if you would if you have the the ability to do that. Okay. Sounds good. If you click okay. Go ahead. Yeah. Let's let's see what if it goes and if, if it gets worse, then, we'll adjust. Okay? Okay. So, we're gonna start off with the general business overview aimed at, mainly those in the audience that are less familiar with the IOFINA story, but this will also give a more updated background information on our current investors as well. So IOFINA essentially is a specialty chemical company. We're aim listed, and we are our core business is halogen based chemistries. So iodine, chlorine, fluorine based chemistries.

3:53 And this is our core business. And we unique in this space because we

3:58 are also backward integrated into a key raw material for us, and that is iodine. And we have we believe we're the one one of the most efficient producers globally of iodine, where we use our proprietary technology to extract odine from produced water. So that's water that oil and gas companies produce as Tom, I'm I'm I'm so sorry to cut across you, but I I think it would just be in the interest of the attendees. If we just wait a couple of minutes and allow you to dial in, can you see at the top of the, presentation above, the panel, there's a little round wheel that says settings. If you were to click on that, on the left hand side, you will see, the ability to click on dial in audio. That will give you a telephone number and the ability to dial the number with a passcode and an ID code.

4:49 Would you be able to do that? It's just you're you've gone into silent mode for some reason.

4:54 Can you hear me at all? It's very, very faint, and I suspect that it would be, more more, accessible for the attendees if we could just take a minute to have you dial in if you have that functionality to do that. I'm trying it now. Perfect. Thank you very much. In the meantime, let me just let me just put you on mute there, Tom. Just to remind investors, just whilst Tom is dialing in, that we will be making a recording available along with the slides and the published Q and A. And again, we will send you a notification when they're ready for you to review.

5:35 Tom is now just dialing back in, so it will only be a couple of minutes. And apologies once again just for this pause whilst we wait for Tom to dial in. Thank you. Hello, Mark? Hi, Tom. That's much better. Thank you so much, and apologies for the brief delay. So if I could hand back to you to perhaps just start again on this slide, that would be brilliant. Thank you very much indeed, Tom. That's great, Mark. Thanks for taking care of that. Okay. So getting back to where we were, this is just a general business overview operations. And essentially, we are an iodine based specialty chemical manufacturer with also expertise in other halogen based chemistries. So chloro, fluoro, iodo based chemistries is our core technologies.

6:31 And what's unique about IOFINA in certain ways is that we are backward integrated in one

6:37 of the key raw materials for us and that's iodine. And we gather our iodine through our company called IOFINA Resources, which extracts using our unique proprietary technology, extracts iodine from wastewater that's also produced in oil and gas industry. So we're using produced water from the oil and gas industry to having value from that stream and produce iodine. All of our operations are in The United States, which is a major importer of iodine compared to the amount of iodine produced in The States. We're growing in both iodine production and specialty chemical products within the organization and diverse industries served in iodine and non iodine based offerings.

7:24 The global market for iodine is the ever expanding market with the exception of a little bit of a hiccup that most industries, found during the COVID year of 2020. But, Iodine is used in a wide variety of, applications and, technologies. And we feel like we have built an excellent management team with diverse backgrounds in oil and gas, geology, finance, chemistry, the iodine market. So we feel like the management team is well positioned to continue to execute the business strategy of the company and grow the outlook moving forward. As we move to the next slide, this is just a general update of where our operations are. As I said, all of our operations are in The United States and we basically have two core business units. One is IOFINA Resources, which produces the iodine that we use for our iodine based products.

8:17 And that's we have an office in Denver, Colorado, and all of our manufacturing facilities are in Western Oklahoma. The Iden chemical facility, which is the second business unit of manufacturing, is located in Covington, Kentucky. And the slides that are on the deck gives you kind of a at at the below there, the pictures give you an indication of what our iodine plants kind of look like in Oklahoma. And we put these iodine plants at or near where the convergence of brine water from oil and gas producers occur so we can extract the iodine.

8:57 So to dive into a little bit about what our two main business units do, IOFINA Resources are iodine production unit. We're the second largest producer of iodine in the world, and the cartoon on the right gives you a kind of pictorial of what our unique technology does. We take this iodine rich brine, but it's not a simple brine. It's a brine that is produced as a waste product in the oil and gas industry. It's dirtier than what you would consider most brines, and we use our technology to get clean, pure crystalline ivine out of that process. And we've been doing this for a number of years and have taken a number of years to really perfect that technology. And from 2014 to 2017, that was really the main focus of the organization is to make sure we were one of the lowest cost producers in the world of iodine, get that technology down to levels where we can take these streams and be consistent producers of iodine.

9:56 We have an extensive geological model as well because not all brine streams contain economic amounts of iodine in the stream. So we need to know where the iodine is, where large volumes of water are, and we feel like we have that mapped out in The United States. So we know where to put plants for current operations and where oil and gas companies may go in the future. We can be ahead of them and be part of that process as well for our expansion. We did last year in April opened up our latest plant, IO Number 8. It was opened at a cost of just under $3,000,000 on time and on budget, and now we are operating five plants in Oklahoma. But we are not satisfied with just having five plants. We are actively pursuing expansion opportunities.

10:43 These are likely to occur at the end of this year, possibly early next year. It is very important to us that we put future growth at IOFINA resources in the correct areas. Brine supply in The United States, there is a lot of water that's produced. Billions of gallons of water are disposed of every day from oil and gas operations. However, iodide is not in high concentrations in all those streams. We need to make sure that we build plants where there's going to be an abundance of water in the future where growth continues. Currently, oil and gas companies have taken a little bit different approach after the low oil prices hit during the middle of the COVID pandemic. They've been a little bit more conservative in how their cash is spent and less active in drilling new wells, completing old wells, or maintaining current wells. So we need to make sure that when we expand our next opportunity, that we have as much information as we possibly can, that we're expanding in an expanding iodine market and make the right choice for the company and our investors.

11:55 The second business operating unit within IOFINA is IOFINA Chemical. It's a specialty chemical company that takes all of the iodine from IOFINA resources and either sells the iodine into the open market, produces iodine based derivatives, and it also creates non iron based derivatives. It's an established company that IOFINA purchased back in 2009 and is known globally and has worldwide well, a worldwide reputation and sales channel for our particular products. To the right, the the graphic shows general iodine uses around the world. You can see iodine is used in many different industries and not a singular main application.

12:40 The biggest application is x-ray contrast media. So those are injectable drugs that your doctor may use in order to maybe get a better image of the CT scan. But there's many other applications that are used in iodine that iodine is used for as well. At IOFINA Chemical, we produce a wide range of iodine based products. Some of those go into biocides, some go into animal care applications, pharmaceutical ingredients and other industrial applications, just to give you a flavor of what IOFINA chemical actually does. We are focused on R and D to produce new products, both iodine based and non iodine based. And one of the things that I think we don't do a very good job of is to expound on the noniodine compounds that we produce at iAthena Chemical.

13:33 So last year, we produced about 38% of our total sales from non iodine based products. So halogen based products that are chloro fluoro based products. And so we have this diversity of iodine, iodine based products, non iodine based products that gives the company stability in these kind of times when certain markets can go up and down. We saw that very prevalently in 2020 where things that were out of our control during the pandemic caused markets to contract in certain areas. We have seen because of the COVID global market slowdown, second half of twenty twenty iodine demand and sales were below our expectations and below what would have normally happened.

14:24 But we have seen also some strong recovery in early twenty twenty one. We carried some larger than expected inventories, which you can see in our financial results at the end of twenty twenty, but we've actually moved through those pretty well already moving into the end of May of twenty twenty one.

14:44 And the last background slide, think, is one that if you are familiar with IOFINA and IOFINA and its presentations in the past, This is a slide that I think provides a lot of just general information on iodine demand and iodine prices in the market. The red line on this slide depicts iodine consumption globally and the yellow line, solid line depicts generalized pricing for large quantities of iodine. The dash lines are predictors of where we think the market is going. So overall, what happened in 2020 is that you can see the demand of iodine went down about 8% to 10%. We were at 36,000 metric tons or so of global iodine demand in 2019, and that fell to about 34,000 metric tons in 2020.

15:38 We expect that and we've seen indications of that already into 2021 that that demand has already recovered. We do expect 2021 levels of demand to be very similar to 2019 levels. So essentially, what's happened is that the COVID pandemic and the global economic turndown kind of cost the iodine world about two years of growth and expansion. Typically, as you can see from the red line, iodine usages have gone up year over year at about a 3% to 5% clip, so about 1,000 metric ton or more kind of rate moving forward. Ivan prices at the beginning of last year were at about the $34 to $37 a kilo range. They did fall a little bit, a couple of dollars a kilo in the second half of last year and but then remain steady throughout the second half of last year and into early twenty twenty one.

16:29 As we moved into the second quarter of twenty twenty two, we've seen prices already start to increase and now we're about at the same level that we were when we started in 2020. We do anticipate that with the demand increasing in the item market as the global economy increases that we believe that item prices have more opportunity to move higher than they do lower. So that will depend on how quickly the economies around the world open. We are more optimistic about increase in iron and price throughout the rest of the year. That gives some basic background on the organization, what we do. And this is a little bit more about what's happened in 2020 and the progress that we've made. So for us, it's we've I think we've managed very well during this particular period.

17:25 Even with 2021 being a horrible year for everybody, I think IOFINA managed its business very well. We had record iron production. We continue to be one of the lowest cost producers in the world. And we've executed our building of IO number eight to solidify our iron production in Western Oklahoma. The more plants that we produce iodine from in Western Oklahoma, again, it gives us diversity. So if there's ups and downs at any one particular plant, the other plants

18:02 can give us that consistency of production as a group. And I think one of the most important things that we did as an organization in 2020 is shown in number four here, and that is we refinanced debt. This is important as we strengthen the balance sheet for IOFINA. We've reduced future finance charges. We've basically cut our debt in half over the last twenty four months. We did use some cash to do that. But now we have an ability to have a manageable debt, a debt to EBITDA ratio that is reasonable. It's managed through a established bank in The United States. It has a term loan portion of it and a line of credit portion of it, which allows us to not only use our cash flow with the reduced finance expenses to

18:57 use our cash for expansion. But if we do need to draw on the line of credit for more aggressive expansion, we have the capabilities to do so. And we are looking to expand on both our IOFINA resource and IOFINA chemical business lines. And we will continue to evaluate those opportunities moving forward. We have good liquidity moving forward. And as I said, it's in the previous slide, the iron market has recovered, is recovering and we anticipate continued growth in this market.

19:36 This slide shows some key KPIs for us, some metrics that we really look at as an organization to see whether or not we're progressing as we should. Revenue, EBITDA, iodine production. Those are some key metrics. And you can see what we've been doing year on year. If we were to take this graph on the left back before 2017, IOFINA was not profitable. We've really worked on our technology. We've worked on where our plants go and we've created a company that is now sustainably a profitable company producing more and more iodine and iodine based chemicals and even non iodine based chemicals.

20:22 So we got the technology right when we moved into expansion mode, but prudent expansion so that we don't so we try to minimize any hiccups in our production moving forward. But we need to be smart on our expansion. We will do that. And we will be especially now trying to gather as much data as possible with the change in climate in the oil and gas industry in The United States. We want to make sure that we at our future sites of IO-nine or IO-ten are in the right place with plenty of water for us to process and isolate iodine. I do wanna spend a little bit of time on how COVID affected IOFINA.

21:09 And, you know, 2020 was just a bad year. It stunk, and I don't think anybody really enjoyed 2020. We're we're moving through this. And I and one thing I wanna say is I am very proud of our operations team, our employees for keeping the momentum of IOFINA in 2020. All of our plants operated as essential businesses during the pandemic. There was a brief closure that was out of our control at IO eight due to water supply, and but our employees did a great job of coming to work every day and executing the mission of IOFINA, and that is to produce iodine and iodine based specialty chemicals to meet our customers' needs.

21:57 The market was affected by COVID. The first half of the year less so than the second half of the year. Demand for iodine in the second half of the year went down and therefore pricing went down slightly as we've talked about earlier. But also early in 2021, we've seen demand increase and prices go back to those normalized level, which is very promising. We did take advantage of forgivable loans from The U. S. CARES Act due to COVID-nineteen. And we did have some inventory levels that were higher than expected ending the year. As I said before, those inventory levels have been mostly worked through and sold within early twenty twenty one.

22:43 Although the demand is for iodine, it's fallen in some industries. One of the things that I'm very proud of as an organization is we've built a diverse organization. Our non IOFINA products that we sell at IOFINA, we're still pretty strong in 2021 and showed a 38% increase. And we will continue to build a diversified model in order to when we grow the company. Diversified model includes multiple types of iodine based products, multiple types of non iodine based products and iodine production at multiple plants. All those things gives us more stability moving forward.

23:26 At this point, I think I'm going to throw the presentation over to our CFO, Malcolm Lewin. But before we do that, I will say that there's a couple of slides we're going to skip through on the presentation, which gives a little bit of the financial review that was shown in the annual report that we published yesterday and a little bit more on the debt. But what I'm gonna do is I'm gonna take Malcolm to the profit and loss statement and throw it over to him. Okay. Thanks, Tom. So here, I'm gonna give you a brief commentary on the key numbers from our 2020 financials, which, as Tom has just said, were published yesterday and can be found in their entirety on our on our website.

24:17 So if we look at slide 16, profit and loss, we can see that in spite of the effects of the pandemic, 2020 trading results are in around very similar to, but a little better than 2019. Sales were up one and a half percent to $29,700,000. Within that, total sales of iodine products, both raw iodine and derivative compounds, were down 8% to $18,500,000. That reflected a drop in iodine volumes of 28% from 665 metric tons to 476 metric tons, of which 324 metric tons, 68%, were raw iodine sales. The drop in volume was mitigated by average selling price increases of 18% for raw iodine and 26% for derivative products. The volume decrease reflected a slowdown in demand due to the pandemic, but particularly affected the second half of the year.

25:14 The first part of two thousand and twenty one has seen a return of much of the demand that went missing during 2020. By contrast, sales of non iodine products on the second line increased by 23% to $11,200,000, which was volume driven with no overall change in prices. Gross profit increased by 1.9 to $8,400,000 and was unchanged from 2019 at 28% of sales. Increases in margins over cost of materials were offset by some cost increases both at the chemical plant and as regards the average production costs of the Oklahoma plants.

25:53 Administrative expenses fell by 3.6% to $3,700,000, resulting in a 6.7% increase in EBITDA from $4,400,000 in 2019 to $4,700,000 for 2020. After depreciation and amortization of $1,800,000, operating profit came in at $2,900,000 just ahead of the 2019 amount of $2,800,000. Interest payable, a bit further down, was $468,000 lower than for 2,019 at $1,180,000, reflecting lower levels of debt outstanding and lower levels of interest in the last quarter following the refinancing of debt. Refinancing arrangement fees that you see just below there of $480,000 are not expected to recur.

26:44 The 2019 numbers include net loan notes amortization and derivative liability charges of $429,000 which are non cash accounting required for the former convertible debt arrangements. After all the above, the 2020 bottom line profit comes in at $1,300,000 which is $700,000 ahead of twenty nineteen's $600,000 So if we now go to slide 17, the balance sheet, turning to that, items worthy of comment are: As Tom has already mentioned, year end inventories increased by 3,600,000

27:24 and receivables decreased by $2,800,000 as a result of the slowdown in sales towards the end of the year. Much of those effects have been recouped to the first quarter of two thousand and twenty one, and normalization is ongoing. PPP subsidies that we see under liability short term of 1,090,000 are pandemic paycheck protection program, US government loans to subsidize payrolls. We were notified of full forgiveness of those loans in January this year, and that $1,090,000 has been credited to 2,000 and 21 income. The debt of, if you look at the 2019 column, the debt of $18,200,000 at December 19 was due to be repaid in full on 07/01/2020.

28:17 Banks were not enthusiastic about new lending once the effects of the pandemic hit home, but we ultimately achieved refinancing as of mid September with First Financial Bank of Ohio on satisfactory terms. The bank made available a seven year term loan of $10,000,000 repayable in monthly installments

28:35 and a revolving line of credit of $8,000,000 of which $3,000,000 was available and drawn as of September. The remaining $5,200,000 required to settle the $18,200,000 outstanding debt was provided from existing cash resources. Interest payable on the new facilities is currently 3.5% to 4% compared to 7.5% for the former debt arrangements. Interest payable for 2021 is currently estimated at approximately $400,000, which compares to the $1,650,000 interest charge for 2019. Cash flow, which is the last financial slide. The cash flow statement on slide 18 reflects the effects of the items discussed above.

29:23 The CapEx figure, of 2,400,000 includes $1,700,000 spent to complete the construction of IOF plant, bringing the total cost of that plant to $2,900,000

29:36 and $600,000 spent on improvements and replacements at the chemical plant. Cash balances finished 2020 at $3,500,000, a reduction of 5,200,000 from 2019, the biggest factor in the change being the $5,200,000 used as part of the repayment of the old debt. And that completes my financials review. So I'll pass you back to Tom at this point. Great. Thanks, Malcolm. And then, basically, what we wanted to do now is kinda summarize where we kind of are. So, you know, for me and for the organization, exiting 2020 exiting 2020 and into 2021, we feel like we've been we're better positioned than we ever have been. Although 2020 was a bit of a roller coaster with

30:28 changing divide and demand, you know, having to manage through the pandemic, I think we we we did very well. And a key is our debt refinancing to be able to continue to our to our expansion operations and to reduce the amount of money that we're spending on debt. Now what is our mission? Now we must execute this growth, but we need to be very deliberate on our locations and our partners for this growth, both at IOFINA Resources and the products that we do at IOFINA Chemical. We have a unique technology. We have established this unique low cost technology to extract iodine. We're in a market where the commodity is in demand. It's in a specialty niche market, which is continually growing and then we are a low cost producer, but it's increasing. So we're in an increasing market.

31:18 We've proven our strategy and strengthened our balance sheet. We've diversified our business, which has shown very much in 2020 on how this diversification helps

31:27 the stability and the growth of the organization. And we have the right people, we believe, to do that. We continue to look for those key managers in order to continue to grow the operations. Before we get to questions, I just wanted to thank our investors, thank our employees for your support, your investment in the organization and tell you we are committed to continuing to grow IOFINA, continuing to tell the story and continuing to create shareholder value from the organization. And at this point, Mark, I think I'll throw it back to you for questions and then we can get to questions today. Yes, that's brilliant. Thank you very much indeed, Tom and to Malcolm for updating investors today.

32:18 Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right hand corner of your screen. But just while we give the company a few moments to review the investor questions submitted today, like I reminded earlier, a recording of this presentation, along with the slides, will be available to you post this meeting.

32:35 I'd also like to remind you that your feedback is important to the company. And immediately after the presentation has ended, we will redirect you for the opportunity to provide your feedback order that the company can better understand your views and expectations. Well, enough about that. Let's deal with the presubmitted questions. Obviously, Tom, investors, as you know, had the ability to presubmit questions. So firstly, thank you to all of those that did. And I know we've probably touched on some of these issues within the presentation, Tom, but perhaps you could add a bit of color where it's appropriate. The first question is when can shareholders expect to see a financial return from the investment in the seeds venture? Yeah. So, that is an aspect we didn't really cover in the in the presentation. IOFINA did look into, through its subsidiary, IOFINA EX, into CBD market, and we made an investment into a company called Organic Vines, which produced a little over 22,000,000 seeds.

33:36 These are 22,000,000 certified organic seeds to be able to grow hemp for CBD production. Frankly, we're hoping to have a return on this investment by now, but really the COVID has substantially curtailed the growing of hemp in The United States in 2020 and likely into 2021. So what we're doing now is we're working with our partner to qualify and market these seeds, and we're now working on large international opportunities for these seed sales. It's really unclear right now when they were sold, but we have currently sold hundreds of thousands of these seeds. So we need to obviously sell millions. But one large scale sale should pay back this investment. We're confident in being able to get this investment back to the organization and actually make profit, but the time line is a bit unclear, and we hope to have significant progress in 2020 and '20 I'm sorry, in 2021 and probably into 2022.

34:34 Thank you very much indeed. And there were a couple of other questions around partly investing in IOFINA back in October 2020. So to the investor that submitted that, that obviously will address your question as well. Perhaps the next question reads as follows. Why has a FEMA struggled to increase iodine production despite opening a new plant? Yes. So I touched on that a little bit in the presentation, but there's a couple of factors here. We had some lost time at IOF in 2020 when the oil prices went to zero, and we lost some production time. There's also, in 2021, a weather, occurrence, which was abnormal in The United States that really lost two weeks of production. But there's also some cyclical things that are going on in the oil and gas industry where oil and gas companies are spending less on new oil production, recompletion of wells and maintenance in the field. So we are seeing some cyclical we are seeing oil and gas companies conserve cash, spend less on their fields.

35:36 And therefore, brine water available has declined slightly to some of our plants. And that's why we're seeing a little bit lower production. But this is a cyclical thing as oil prices are more steady and they've been steady at $60 a barrel or above in The United States for the last six to nine months. As these things continue to do that, do expect oil and gas companies to open up their pocketbooks a little bit more and expand their production. So those are the main reasons why our item production probably is a little bit behind where we expected. But I will say that we are still producing large quantities of iodine at low prices, and we will continue to do so at our five plants. That's great. Thank you very much indeed. What is IOFINA doing to secure steady supply of brine to ensure disruptions are limited in the future?

36:28 Yeah. So, you know, this is a bit of a risk for the organization as we do use produced water, but it's also an advantage that the supply is cheap and available. So what we do is we work with our partners to move water available to our plants, whether it is moving it from different ones of their saltwater disposal sites or working with them to in their pipeline system in order to move water to our plants. In the future, we need to make sure we place plants place plants, that's difficult to say, at areas of where brine comes together or confluence of brine. And we really did that when we, as an example, when we build IOF 7, we made sure that we put IOF 7 at a spot where multiple pipelines come together so we're not associated with one particular particular SWD, but can extract water before it goes to many SWDs.

37:23 And it's also important for us to place future plants where there's abundance of water and activity. And those are the things that we're doing. That's great. And I don't know whether this question actually follows on from that, but actually it reads as follows. Can you confirm the company's current cash flow and forward outlook in the context of timing of investments in future production facilities or for upgrading existing operations? Yes. So I think I mentioned this a little bit in the presentation. Our cash flow is good. When we refinanced the debt and reduced the total amount of debt in our debt costs, and we're actually a very profitable cash positive flowing company. We feel cash flow is not really an issue to execute current expansion plans. And those current expansion plans, we expect to be able to deliver at least on a high end plant kind of basis at the end of this year or early next year.

38:17 But we also have projects on at product lines at IOFINA Chemical that we continue to invest in as well. Great. Thank you. Just reading another question here, it reads as follows: In H1 of twenty nineteen's results, working on a pilot expansion of a non iodine process to scale up to larger reactions in order to meet the increasing needs of our major customer. The question is any news on that? Yeah. So one of the things that I know investors probably wanna unfortunately, we can't. We we don't give some specifics on certain products, some certain individual products for competitive reasons. But this is a product this is a I can tell you this is a non item based product.

39:08 And as we mentioned, our non item based products increased about 38% year on year from 2019 to 2020. But this is an expansion that we are working on and continuing to grow. It's a new type of process to improve our capacities and efficiencies in that particular product line and even the quality of this product. So this is a staged expansion, which we've already executed parts of it, and there's additional parts that we're going to be able to do, and this supports a non audit based product. Thank you very much indeed, Tom. There was a number of questions that we received around, I guess, shareholder engagement, shareholder value.

39:55 So I've kind of put them together. So if it isn't reading exactly to one of the investors' questions, you'll you'll hopefully get the gist here. But in essence, you know, IOFINA has made great strides over the last year, but the share price remains very low. What is the board doing look looking to do to create shareholder value? And I guess upon that is, I guess, the expansion on your your views of of future engagement with investors. Yeah. So, yeah, it is a question that we've gotten, and it's it's something that we realized is beneficial to everyone on this call. Right? Everybody in our boardroom, everybody, all of our investors. So I'll try to answer this as best I can. So the first thing that we can do is operate the company in a positive manner, keep producing profits with a focus on growth both at our IOFINA Resources, IOFINA Chemical operations, and continue to boost the operational and functional strength of the company. Those are some things that management can't control and must execute.

40:55 The item market is healthy, and we need to be able to and we're in an industry where it's growing. But we need to do this expansion and growth prudently within the organization to not only grow the company, but protect from downturns and too high of a risk. We're also looking for proper partnerships, new products, and potential acquisitions in order to build shareholder value. As we've mentioned, communications, it's something that in 2020 was a little bit more difficult than others, but we need to continue to improve upon. And, we are seeking and actively seeking new investor audiences to tell what I think is a great story of a of a company that has unique technology, continues to grow, and is profitable.

41:42 And, you know, platforms like this platform, other social media platforms like Twitter, we are we're committed to. In person road shows, providing quality RNS updates every quarter on our production and issuing new statements right away on any kind of progress within the organization. And we will continue to challenge ourselves and our advisors, our brokers, our PR firms to continue to help us tell the story to the market because I think we have a great story, and I think we are undervalued. And those are the kind of things that we are going to continue to work on our operations and the messaging of the organization to create shareholder value. That's great, Tom. I guess the remaining presubmitted questions really talk about production and that kind of thing. And I'm very mindful of the time, you've got an awful lot of questions that have come in as well. A lot of those, I think, you've touched upon, and I think some of those relate to production. So I thought you might might be able to kill two birds with one stone. So if I could just ask you to open up the q and a tab, on the right hand side of your screen.

42:50 And then if I could ask you to read out any questions where it's appropriate to do so and give a response where it the way where you can. And, of course, for any questions that we don't get through in this this meeting today, obviously, we'll we'll we'll present to you afterwards so you can review them there as well. Sounds good, Mark. I'll pick a few questions out and then and try to answer them, and then we'll we'll wrap up here a little bit. One of the questions we got is what happens to the wastewater once item is extracted? So our partnership agreements, what we do is we we basically borrow the water. We take we we are on their pipeline before it would generally go down to a saltwater disposal site. We do our magic and take out the iodine, and then we give it back to them.

43:36 So our partners actually dispose of the water once the iodine is removed. So that's what happens to the wastewater once iodine is extracted. Another question here is, who are the main competitors in this space? And also, you consider listing in The U. S? So main competitors for iodine production, the largest iodine producer in the world is a company called SQM. They are Chilean based, but NYSE listed, and they produce about a third of the world's item. Chile itself has four major producers. They produce about near 70 sorry, about 60% of the world's item. There's Japanese companies that produce about 30% of the world's iodine.

44:22 The rest are around the world. In The United States, we have two competitors, both Oklahoma based, and we are the second largest producer. Would we consider listing in The United States? It is a consideration. There is cost of being a publicly traded company. And while our operations are in The United States, we are currently listed in The UK, but it is something we would consider in the future. Let's look at some other questions here. There's a couple of questions on here about water supply and what we may do in order to stabilize water supply. We touched on that in the future, but I guess what I wanna say is we have a model where we use produced water to isolate iodine.

45:16 Some of the considerations that we're doing in the future in order to sustainably have water supply to our sites are working with our partners to reopen wells that they have already shut in, to maybe convert some of these older wells to brine producing wells, which would entail basically drilling that well deeper in order to get into the water cut underneath the oil water layer. Actually drilling our own brine wells and saltwater disposal wells so we can control those brines more than having to rely on produced water. Those are some things we're already talking to partners about that we're modeling financially and may be part of our future strategy in Ivan plans.

46:07 I'll take one or two I'll try to do one or two more questions here before we end up. Will we see more buying of shares from director to inspire confidence now the results are out? I can't speak for that. Directors are myself and Lance have bought shares here recently, and I would I I can say that the directors are very pleased with the way the company is moving. Some of the some of the directors also have options, which means that they are they have a very much of an interest in shares itself. And, you know, I can say that, you know, my entire income and stability is IOFINA. So I am fully immersed in the success for IOFINA and its shareholders.

47:02 I'll take one or two more here. SGA reduced in the period. Does any of this cut need to be come back as the conditions normalize? The answer is no. One of the things I think we're really good at is we're geared very well to for expansion. We have an administrative overview in order to manage plants. And so we don't have to take on much of any administrative expense as we expand our operations. As we go in outside of our core areas, these administrative expenses may rise, minorly, but it is, it's one thing that's, I'm proud of the way we built the company so we can, expand and are well geared to do that.

47:56 And then let me find one more here. You know, What's the investment case for new and existing shareholders? And then I'll answer that and we'll end on this. And I think this will be a good summary. So I have the summary slide still up from where we are. IOFINA is no longer a company of thought. We are a company of production. We have a unique technology and an expanding market that is a low cost producer of any of the iodine producers in the world. We have diversification within our organization to use that iodine and build it into iodine based products.

48:43 And we also have diversification into non iodine based products. We've showed over the last few years that we are profitable and in markets that are expanding. And I think we've done very well to continue to grow the organization and we've done so smartly. And so, I think that's the investment case that we continue to grow as an organization. We're well thought out and have unique technology. And I think that message just needs to be sent out to more and more investors and we need to get that message out. So with that, Mark, I want to thank you, and I want to thank all of our participants in the call today, and I'll throw it back to you. That's great. Thank you very much indeed, both to Tom and to Malcolm. And thank you for also for coming in, ladies and gentlemen, today.

49:30 Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide feedback in order that management team can better understand your views and expectations. This will only take a few moments to complete and is greatly valued by the company. As I said earlier, we will review all the questions and make them available to the company. So once again, thank you to those investors that submitted questions today. On behalf of the management team of IOFINA PLC, I'd like to thank you very much for attending today's presentation. That now concludes today's session, and good afternoon to you all. Thank you.