Carbonxt Group Limited (ASX: CG1) (“Carbonxt” or “the Company”) has announced its Half-Year (HY25) results today, 28 February 2025. The report highlights major progress, particularly with the successful mechanical completion of its flagship Kentucky activated carbon plant. The Company remains confident in a strong second half of FY25, driven by increasing PAC demand, cost-reduction initiatives, and the ramp-up of its new facility.
Revenue Performance and Growth Prospects
Carbonxt reported $7.4 million in revenue for HY25. The Company has already seen a significant ramp-up in deliveries in Q3FY25, as noted in its 27 November 2024 ASX announcement.
The revenue breakdown shows:
- Pellet sales accounted for 47% of total revenue but saw a 29% decline due to conveyor issues at its largest ACP customer.
- Powdered Activated Carbon (PAC) contributed 53% of revenue, with a 13% increase from HY24. The growth came from higher sales volumes under the ReWorld Waste contract, which started on 1 October 2024.
Expanding Margins and Improving Cost Efficiency
The Company’s gross margin rose to 49%, up from 44% in HY24 and 28% in HY23. This reflects price increases and reduced operating costs, including a further reduction in manufacturing shifts at Arden Hills.
Carbonxt has also launched cost-cutting initiatives at its Black Birch facility. The Company plans to announce structural lease adjustments soon, which should further improve efficiency.
Kentucky Plant Reaches Mechanical Completion – A Major Milestone
One of the biggest highlights of HY25 is the mechanical completion of the Kentucky Activated Carbon Plant as of 18 December 2024. This facility, jointly owned with Kentucky Carbon Processing, LLC (KCP), is a game-changer for Carbonxt’s growth strategy.
Key Facts About the Kentucky Facility
- Initial production capacity of 10,000 tons per annum, with the ability to expand to 20,000 tons for a small additional investment.
- Carbonxt has invested USD $6.75 million into the project, holding a 40.3% ownership stake in NewCarbon Processing, LLC.
- The Company has options to increase its stake to 50% with an additional USD $3.25 million investment.
- The plant’s commissioning phase is underway, with full-scale operations expected to commence in 2H25.
Carbonxt Managing Director Warren Murphy expressed strong confidence in the Company’s future:
“We have taken significant steps to strengthen our operational and financial position. The successful mechanical completion of our Kentucky activated carbon plant marks a major milestone, and we are now focused on ramping up production to meet growing demand. Additionally, our PAC segment continues to show strong performance, reflecting increased adoption of our solutions in key industrial markets.”
Figure 2: Carbonxt Group Managing Director Warren Murphy
Cost and Operational Adjustments to Strengthen Financials
The Company made strategic adjustments to reduce costs and improve operational efficiency:
- Optimised Cost Structure: A 17% reduction in shipping costs has improved overall cost efficiency, strengthening profitability.
- Strategic Growth Investments: Operating costs increased to $3.5 million, reflecting the Company’s commitment to expanding operations at the Kentucky facility. These investments are set to drive greater efficiencies, with significant cost savings expected in 2H25, as highlighted in the 31 January 2025 ASX announcement.
- Robust Financial Position: With a well-structured $15 million facility from Pure Asset Management, maturing in May 2027, the Company maintains strong financial flexibility to support future growth and innovation.
Capital Raise and Corporate Developments
To support its growth, Carbonxt raised $3.02 million through an equity issue of 46.4 million shares at $0.065 per share. The Company also:
- Issued 1 million shares at $0.06 per share in December 2024.
- Announced a Share Purchase Plan (SPP) on 17 February 2025, aiming to raise $2 million at $0.06 per share.
- Provided investors with a 1:2 ratio of unlisted options, expiring in two years with an exercise price of $0.10 per share.
Strategic Outlook – Positioned for a Strong 2H25
Looking ahead, Carbonxt prioritises the full-scale launch of the Kentucky plant, focusing on:
- Optimising coal processing and finalising high-temperature wiring installations.
- Reducing costs through strategic efficiency measures at Black Birch and Arden Hills.
- Expanding its presence in the waste-to-energy and water purification sectors.
- Leveraging global environmental regulations driving demand for mercury and PFAS removal solutions.
Mr. Murphy has mentioned,
“Looking ahead, we are confident in Carbonxt’s ability to drive improved financial results in the second half of the year. The completion of the Kentucky plant provides a clear path to revenue growth, while our ongoing cost-reduction initiatives will support margin expansion. With tightening environmental regulations globally, the demand for our advanced activated carbon products is expected to rise, positioning us well for long-term success.”
Final Thoughts – A Transformational Year for Carbonxt
HY25 presented short-term revenue pressures, but Carbonxt made significant progress in expanding its capacity and positioning for long-term success. With the Kentucky plant ready for production and cost-control initiatives in place, the Company expects a much stronger financial performance in the second half of FY25.
Carbonxt has built a solid foundation to capitalise on rising demand for activated carbon solutions and drive long-term shareholder value. Investors can expect exciting developments in the coming months, as the Company moves into full-scale operations at its new flagship plant in Kentucky.
Investor’s Outlook – Carbonxt Group Limited (ASX:CG1)
Stock Performance & Market Standing
Carbonxt Group Limited (ASX:CG1) has shown strong investor interest, reflected in its 5.263% price increase today (February 28, 2025), closing at $0.060. The Company’s market capitalisation stands at $22.14 million, positioning it as a key player in the environmental technology sector with a growing footprint in activated carbon production.
Key Market Indicators
- Last Price: $0.060 (+5.263%)
- Previous Close: $0.057
- 52-Week Range: $0.052 – $0.100
- Shares on Issue: 388,484,143
- 1-Week Performance: +1.69%
Investor Sentiment & Growth Catalysts
Despite short-term revenue challenges, Carbonxt is in a strong growth phase, driven by:
✅ Kentucky Plant Commissioning – Set to boost revenue in 2H25, expanding production capacity significantly.
✅ Rising Demand for Activated Carbon – Global regulatory trends in mercury and PFAS removal support long-term market expansion.
✅ Cost Reduction Strategies – Operational efficiencies and lease adjustments at existing plants are improving financials.
✅ Shareholder Value Initiatives – A well-supported capital raise strengthens the balance sheet while offering unlisted options for further upside.
