Published On: February 2nd, 2023
Carbonxt Group LTD (ASX: CG1) (“Carbonxt” or the “Company”) has released its December 2022 quarterly report highlighting the key activities of the Company.
R&D and Industry Activities
Carbonxt’s research and development team completed a program focusing on ‘the effects of heat treatment on Activated Carbon’ with the help of a renowned R&D service company. The research output is favourable and supports the development of Carbonxt’s new ACP plant in Kentucky.
Carbonxt Group also attended the North American Biochar and Bioenergy Conference about biomass utilisation for bioenergy production, pertaining to the Company’s focus on ESG objectives and the use of renewable sources of raw material for producing Powdered Activated Carbon (PAC) at its Black Birch plant.
The Company expects moderation of prices for Activated Carbon products manufactured overseas, given the decrease in ocean shipping rates to import products into the US. However, industrial customers continue to show a strong preference for domestically produced PAC and Activated Carbon Pellet (ACP) products.
Customer receipts
Customer receipts decreased by 24% compared to the previous quarter due to the installation of a new mill (with higher capacity) at the Black Birch PAC facility and an upgrade at Arden Hills pellet plant to increase product quality and higher throughput. The works at both plants are complete, and the production levels have returned to normal.
Revenue and Operating Cash Flow
- Activated Carbon Pellet and Powdered Activated Carbon revenue were down by 20% and 17%, respectively, compared to the same quarter in the previous year due to the plants’ downtime, as mentioned earlier.
- Compared to the previous quarter, Carbonxt recorded an 11% increase in product manufacturing and operating costs owing to the new mill installation at the Black Birch plant. The new mill will increase its operating capacity by reducing downtime, improving flexibility, and meeting customer orders.
- The Arden Hills pellet facility improvement is expected to reduce ongoing operating costs for all pellet products.
- Customers showed strong demand for both pellets and PAC, given the restriction of sales by overall product availability due to the modification of plants.
- Carbonxt’s net cash inflows from financing activities were around AUD 5.5M, made up of proceeds from the issue of equity securities.
- Net cash outflows from investing activities were AUD 329K and are reflected in the development of new pellet products.
Kentucky Joint Venture Progress
The majority of the development and engineering feasibility work has been completed. The Kentucky Joint Venture is now being legally documented and is expected to be completed this quarter. Carbonxt will notify further updates on the Kentucky JV.
Investment Outlook
Carbonxt Group looks forward to working with its customers to develop new technologies. The company’s overall progress facilitated a recent fund-raising effort to develop a new ACP plant in Kentucky.
Managing Director Warren Murphy said,
“Carbonxt has made good progress this month. The decrease in revenue was anticipated due to scheduled maintenance, and we can confirm that output has returned to normal levels, with both plants operating at near full capacity. Our near-term focus is significantly adding to capacity and expanding our product
suite by bringing Kentucky online as soon as possible. With JV terms finalised and the legal framework pending, we are confident that we can advance construction very rapidly. Carbonxt is well positioned to benefit from increasing investment in emissions reductions throughout the United States and other larger markets, underpinned by government legislation. Added capacity brings with it the ability to enter new market segments, and our team in the US is well-advanced here. I look forward to providing a fuller update on Kentucky next month.”
About Carbonxt Group
Carbonxt is a cleantech company specialising in developing and marketing Activated Carbon products to comply with air and water emission requirements and remove harmful pollutants. The Company primarily operates in the United States and continues to expand its Powdered Activated Carbon and Activated Carbon pellets product portfolio to address numerous industrial applications.
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