Carbonxt Group (ASX:CG1) Raises Revenue Target Following Strategic Wins

Highlights

• Carbonxt has increased its 2HFY25 revenue guidance to AU$10.0 million with a gross margin of 40%.
• The company has secured additional purchase orders worth AU$3.6 million from Wisconsin Public Services.
• A 4-year deal with Reworld is expected to add another AU$3.6 million to revenue.
• CG1 shares jumped 20% to AU$0.063.

Carbonxt Group Ltd (ASX:CG1) has revised its revenue guidance for the second half of FY25, raising it to AU$10.0 million, reflecting a 40% increase compared to the same period last year. This forecast excludes potential revenue from the soon-to-be commissioned Kentucky plant, the company’s flagship joint venture with New Carbon Processing, LLC.

The upgraded outlook is driven by significant contracts and price increases, including AU$3.6 million in additional purchase orders with Wisconsin Public Services and a 4-year agreement with Reworld, expected to generate AU$3.6 million in revenue.

Additional purchase order with Wisconsin Public Service

Wisconsin Public Service (WPS), the largest and long-standing customer of CG1, has issued forward guidance for AU$3.6 million in purchase orders for Activated Carbon Pellets (AC Pellets) in 2HFY25. Of this, AU$1.8 million will be recognised in 3QFY25. WPS will use AC Pellets in its innovative ReACT (Regenerative Activated Coke Technology) emissions control systems designed to reduce emissions from coal-fired power plants.

This additional order follows a AU$4.3 million contract finalised in May 2024 for a six-month supply of AC Pellets.

Revenues generated from contract with ReWorld

The 4-year contract with ReWorld, which commenced on 1 October 2024, has already generated initial revenues. The agreement is expected to contribute approximately AU$3.6 million in revenue in 2HFY25. The agreement is for the supply of powdered activated carbon (PAC) from the Black Birch facility located in Georgia.

Reworld will deploy PAC across its thermomechanical treatment facilities (TTFs) in the United States. These facilities use activated carbon technology to remove mercury, dioxins, and furans from emissions.

Additionally, CG1 has achieved a 7.1% price increase and renewed contracts with its municipal client base.

Update on Kentucky Plant Construction

Recently, the company conducted a site visit with its major capital provider, PURE Asset Management (PAM) to assess the progress of its Kentucky plant construction. The kiln capital works are nearing completion.  

The Kentucky plant is on track for initial production with initial test runs expected in December. By 2HFY25, the NewCarbon joint venture is expected to begin contributing to group revenues.

CG1 shares trade higher

Following the update, CG1’s share price surged 20% to trade at AU$0.063 per share on 27 November 2024.