Carbonxt (ASX:CG1) sees operating cashflow positive quarter with strong product demand - Kalkine Media

Highlights

• Carbonxt (ASX:CG1) has delivered another quarter of strong performance in the US cleantech space.
• The operating cashflow positive quarter saw an increase of 19% in customer receipts and 17% in PAC sales.
• The company’s largest customer extended its ACP supply agreement till 2030.
• CG1 remains focused on boosting its product sales and commencing the development of its new plant.
• The company has also boosted its financial position with a recent capital raising program.

ASX-listed Carbonxt Group (ASX:CG1) continues to experience strong demand for its activated carbon solutions including powdered activated carbon (PAC) and activated carbon pellets. The recently released report for the quarter ended 30 September 2022 substantiates the company’s significant progress in the cleantech space of the United States.

During the reported period, the company saw the positive turnaround in cash, as well as the increase in pricing across several contracts.

Impressive financial metrics for September quarter

CG1 reported nearly AU$5.1 million in customer receipts during the September quarter, up 19% from AU$4.1 million in the prior quarter. The company attributed this growth to continued strong demand for its products.

In terms of revenue, the Powdered Activated Carbon (PAC) segment registered a 17% quarter-on-quarter increase in revenue, backed by higher sales to the company’s largest industrial customer and seasonal demand.

Operating cashflow positive quarter- In terms of underlying operating cash flow, there was an inflow of AU$0.5 million, which is an AU$1.6 million positive turnaround from the previous quarter.

As per the company, the cash inflow was driven by solid customer receipts from quarterly sales and sales from the prior quarter with longer payment terms.

The net cash outflows from investing activities for the quarter stood at AU$0.3 million, indicating the development of new products and ongoing enhancements to improve efficiency at the company’s Black Birch PAC facility.

Noteworthy developments in September quarter

Research & development - Carbonxt continued research & development work during the quarter.

Last year, the company received a grant worth AU$0.2 million for a Phase 2 work for technology development, focusing on the mitigation of Florida Red Tide algae blooms.

Contract extension to 2030 - The largest customer of Carbonxt extended its ACP supply agreement to 2030 following an initial 6-year contract. The development includes considerable price increases and celebrates the continuance of a highly successful partnership.

The company has operated at near full capacity at both its facilities, i.e., the Arden Hills and Black Birch. At Black Birch, its planned capital improvements in 2023 are expected to deliver redundancy, increase flexibility to meet customer orders, and improve overall operating capacity.

Industrial exhibitions - Carbonxt exhibited at two leading industry events in the US during the quarter:

• The Water Expo – Presentation on its patented HydRestor technology to remove phosphorous in water applications.
• WEFTEC (focus on water quality) – Presented on HydRestor and publicised its new activated carbon pellet plant, planned to open in 2023.

Encouraged by its progress and success in developing new technologies, Carbonxt has been undertaking a fundraising campaign for its new ACAP plant in Kentucky. To know more about this development, read here.

With growing demand for technologies that reduce emissions and reduce pollution, Carbonxt believes that it is at the forefront of this market with existing products and a pipeline of exciting new technologies. The company remains committed to strengthening sales from its existing facilities and commencing the development of its planned Kentucky plant in the coming quarters.

CG1 shares last traded at AU$0.1 on 9 November 2022.