Highlights

• Carbonxt (ASX:CG1) recorded strong demand for both ACP and PAC products during the June 2022 quarter.
• The company clocked 50% surge in customer receipts on pcp.
• The Arden Hills and Black Birch plants are operating at or near to capacity.
• Growing US economic activity, limited domestic supply of ACP and PAC products, and new industrial customers are among the factors driving sales growth.

Carbonxt Group Limited (ASX:CG1) has established its name in the cleantech industry as one of the most prominent players developing and manufacturing environmental technologies that help businesses maintain compliance with air and water emission requirements.

The ASX-listed cleantech company crossed significant mileposts during its journey through the last quarter. CG1 registered a 50% year-on-year increase in customer receipts, backed by new customer orders and growing existing customer volumes for ACP and PAC products.

Image Source: Company Announcement

The major focus for the period was on industrial pellet production to support customer demand. The three-month period ended 30 June 2022 saw the onboarding of new industrial clients, fast development of novel technologies, and progress at its new ACP plant in Kentucky.

Let’s have a look into the developments in the key areas as detailed in the company’s report for the June 2022 quarter.

Quarterly customer receipts up 50%

Carbonxt continues to address a wide range of industrial applications with its pellet product portfolio. Both of its business segments - ACP and PAC - have been prospering well. In June 2022 quarter, the company witnessed a whooping rise in new customer orders as well as existing customer volumes.

• CG1 registered 50% growth on pcp in customer receipts, while there was a 6% increase in June quarter vs. March 2022 quarter. The total customer receipts for the June quarter totalled at AU$4.1 million.
• Revenue from its Activated Carbon Pellet business segment was up 162% as compared to the same quarter in the prior year. This increment in business revenue can be attributed to the resilient demand for ACP products from the company’s largest customer. Also, CG1 has been receiving fresh orders from a new client.
• The Powdered Activated Carbon business unit also recorded a 129% quarter-on-quarter revenue growth. When compared to the previous corresponding quarter, there has been 39% revenue growth in the June quarter.
• During the reported period, both the facilities of the company operated near their full capacity. The Arden Hills pellet facility continued to manufacture 4mm pellets in order to cater to the growing demand for customised ACP solutions. Also, production at its Black Birch PAC facility operated near capacity to fulfil the new orders.

CG1 moving forward with Tech Grant implementation

Carbonxt is steered by its vision to emerge as a leading innovator of new systems that can eliminate industrial pollutants and contaminants successfully.

The ASX-listed company is forging ahead with the implementation of a US$290,000 Innovative Technology Grant. The company received the grant from the Florida Department of Environmental Protection earlier this year for its HydRestor pelletised technology as a treatment option to reduce nutrient levels.

Pockets Favouring CG1 Prospects

Overall, the business growth in the June 2022 quarter was driven by the existing situation of limited domestic supply of these products and booming US economic activity.

Going forward, the company expects that there is high possibility that many supply chain constraints will be moderated. This would directly cut short the order to delivery lead times as well as the overall shipping costs.

Also, there continues to be a movement towards less reliance on overseas sourcing within the United States. This would support the company in its goal of expanding its production capacity in the US.

CG1 shares were trading at AU$0.130 midday on 02 August 2022, with market capitalisation of AU$28.42 million.