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Highlights
- Carbonxt has increased its stake in the Kentucky facility to 43.7% following a recent USD 1 million investment, progressing toward its 50% target.
- Key systems at the plant are nearing completion, with production start targeted for FY26.
- Q4 FY25 revenue reached AUD 4.3 million, with a stable gross margin of 47%.
- A convertible note of AUD 1 million was raised from a major shareholder to support ongoing investment initiatives.
- The company met its AUD 7.2 million contracted revenue target from WPS and ReWorld in H2 FY25.
Carbonxt Group Ltd (ASX:CG1), a developer of advanced activated carbon products for air and water purification, has released its June 2025 quarterly activities report. The update outlined financial performance, operational progress at its Kentucky facility, and a positive outlook driven by regulatory support for clean water solutions.
Kentucky Facility Nears Operational Phase
A key milestone during the quarter was the increase in Carbonxt’s ownership of the Kentucky facility to 43.7%, following a USD 1 million investment. The company is working toward achieving a 50% stake in the project with a further USD 2.25 million investment required to reach that target.
Mechanical completion of the facility has been achieved, and the focus has now shifted to full-scale operational launch. The electrical and control system installations have been completed, with kiln insulation work scheduled for completion in August. Once the kiln is fully installed, the facility will begin progressing toward full-scale carbon production. Most of the other key infrastructure components, such as back-end storage and material handling systems, have also been largely finalised.
Upon completion, the Kentucky facility is expected to significantly contribute to revenue growth and margin expansion in FY26.
Financial Performance and Capital Position
For the June 2025 quarter, the company recorded revenue of AUD 4.3 million and maintained a gross margin of 47%. EBITDA remained positive in every month of the second half of the financial year 2025. The company reduced its operating cash outflow to AUD 266k, down from AUD 367k in the previous quarter, reflecting effective cost control.
To support working capital and growth initiatives, the company completed an AUD 1.0 million convertible note raise with major shareholder, Phelbe Pty Ltd. The note carries a 9.5% interest rate, convertible options with a conversion price of AUD 0.08 per share.
Product Demand Supported by Regulatory Tailwinds
Sales of powdered activated carbon (PAC) remained higher, buoyed by long-term contracts such as the ReWorld agreement and rising demand driven by regulatory momentum around PFAS contamination control. The US EPA recently confirmed strict maximum contaminant levels (MCLs) for PFAS chemicals, including Perfluorooctanoic Acid (PFOA) and Perfluorooctane Sulfonic Acid (PFOS), driving further demand for high-performance water treatment solutions.
With three U.S.-based production sites either operational or nearing completion, the company is strategically positioned to scale its presence across the water treatment and industrial purification markets.
Meanwhile, activated carbon pellet (ACP) volumes held steady following the resolution of prior operational issues at a key customer site. With elevated gas prices and increase in power station activity, ACP demand is expected to remain stable in the near term.
In its previous quarterly update, the company projected AUD 7.2 million in contracted revenue from WPS and ReWorld for the second half of FY25, a target that has now been successfully met.
Positioned for Growth in FY26 and Beyond
The company entered FY26 with a leaner operational structure, restructured cost base, strengthening PAC sales momentum, and normalised ACP demand, as its Kentucky facility nears production. The company seeks to capitalise on the surging demand for PFAS treatment solutions.
Meanwhile, the activated carbon market continues to demonstrate positive growth prospects, with industry experts forecasting a 5–9% CAGR through 2030. The commissioning of the Kentucky facility is expected to expand production capacity by approximately 200%, enabling the company to enter the significantly larger liquid-phase activated carbon market.
With this strategic expansion underway, the company remains committed to bringing the Kentucky facility online and scaling its presence in the growing U.S. market for air and water purification.
CG1 shares traded at AUD 0.068 per share on 25 August 2025.
