Published On: May 1st, 2023
Carbonxt Group Limited (ASX: CG1) (CG1 or Company), a leader in specialised activated carbon pellets (ACP) and Powdered Activated Carbon (PAC) announces its March 2023 quarterly update.
Expedited progress on JV plant for ACP in Kentucky
Carbonxt Group’s JV facility in Kentucky continues to show progressive developments. With prepayment approval of US$500,000, the Company is committed to ramping up the development of a state-of-the-art ACP facility in Kentucky.
The fund will be targeted towards sourcing longer lead-time products for the first phase of construction. The Company is also in the advanced stages of wrapping up legal documentation for JV.
Announcing developments on the Kentucky plant, Managing Director Warren Murphy said
“We have nearly completed the documentation for our Kentucky Joint Venture and are excited to see this long-term strategic initiative come to fruition. The group’s forthcoming expansion in the US water and wastewater industries represents a major commercial opportunity. We look forward to setting out the details of this investment shortly and updating investors on the development timeline and addressable market. In the interim, optimisation of our facilities at Arden Hills and Black Birch leaves the Company well-positioned to drive margin growth from existing operations through the course of 2023.”
Managing Director Mr Warren Murphy
Mr Warren Murphy is an accomplished finance executive with a wealth of experience in the energy, resources, and infrastructure sectors. He has held several pivotal positions in the energy sector companies, such as Australian Infrastructure & Project Finance Group, Babcock & Brown, Infigen Energy, Alinta Limited, Sydney Gas Limited, and Coogee Resources Limited.
Mr Murphy led several large-scale acquisitions and financing for large-scale projects in the energy sector. His contributions have helped shape the industry landscape in Australia and beyond, and his legacy continues to influence the sector.
Financial Outlook:
Carbonxt Group planned capex and implemented efficiency levers last quarter to achieve robust margins at Arden Hills and Black Birch facilities. Carbonxt Group’s Gross Margin improved to 44%, driven by a 30% decline in manufacturing and operating cost on a Q-o-Q basis. Net cash outflow was US$0.9M for the quarter, which included a US$500,000 prepayment for the Kentucky facility.
Revenue from PAC increased 33% from the same quarter last year (Y-o-Y), driven by higher sales to multiple industrial customers; however, on a Q-o-Q basis, sales declined 15% due to warmer winter weather resulting in reduced demand for products by power plants. Customer receipts declined marginally to A$3.7 million for the quarter. It decreased by 4% Q-o-Q basis and 5% compared to last year’s quarter.
In line with warmer winter weather, ACP sales also declined 20% from the same quarter last year (Y-o-Y) and 28% on a Q-o-Q, driven by the lower operating capacity of the largest customer. Lower-than-anticipated natural gas prices also impacted the decline.
The Company is optimistic about achieving rated capacity for the upcoming months, with increasing demand from end-use sectors. On the JV front, Carbonxt Group plans to start the initial phase of construction post-prepayment. The completion will open many commercial opportunities to expand into new customer segments and applications.
In its endeavour to bring new, advanced and sustainable solutions to help with complex water-related problems, the Company will attend the WQA Convention and Exposition, and the AWWA Annual Conference, in the next quarter.
Carbonxt Group: A sneak peek into the core:
In the ACP segment, Carbonxt Group is a leading player and an active participant in the worldwide effort toward making the world a more sustainable planet. For developing new products and improving its existing products, the R&D team has earned a well-deserved reputation for constantly pushing the limits of what is possible.
Oxidising activated carbon that is not brominated and non-corrosive is their specialty. The product does not deteriorate due to highly activated carbon pellets. Their products are designed for use in various settings and are created in the United States using materials acquired locally.
As a result, the Company interacts closely with its business partners to build an active carbon solution that can meet the needs of each sector. Their performance-based testing and open communication ensure that the deployed solutions will continue to benefit. In activated carbon treatment, they offer the best solutions.
What Future Beholds For Carbonxt Group (ASX: CG1) – Investor Perspective
The demand for clean technologies has been on the rise. With increasing focus on climate change and environmental degradation, adopting sustainable practices in energy-intensive industries has become a prerequisite.
Carbonxt’s focus on new-age technologies continues to grow. This has created a huge potential for companies with cleantech solutions, such as Carbonxt. They are well-positioned to provide innovative solutions to help address these challenges. The Company’s focus on innovation, sustainability, and environmental responsibility puts it in a solid position to capitalise on these trends and drive growth in the cleantech industry.
- As of 29 April 2023, it has a market capitalisation of A$13,764,944
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