Carbonxt Group Limited (ASX:CG1) has released its March 2025 Quarterly Activities Report, outlining its strengthened position in the U.S. cleantech market. The Company continues commissioning its Kentucky facility, reporting improved product sales, a restructured cost base, and fresh capital to fund growth.
Carbonxt Managing Director Mr. Warren Murphy said, “This quarter reflects a period of disciplined execution as we position the Company for stronger growth in FY26.”
Mr. Murphy highlighted shareholder support and robust market demand as key contributors to recent progress.
Kentucky Facility Nears Completion
Carbonxt reported that the Kentucky activated carbon facility remains in the commissioning phase. Final electrical and insulation work is underway, and mechanical completion has already occurred. Third-party verification caused design adjustments to insulation and control wiring.
Carbonxt owns a 40.3% stake in NewCarbon Processing, LLC, which developed the plant. The Company retains the right to increase ownership to 50% via three optional investment tranches, totaling US$3.25 million.
Figure 1: The Kentucky Facility nears completion
Commercial production will begin once infrastructure work concludes. Upon completion, the plant will significantly increase Carbonxt’s output. Management expects this to deliver higher revenue and improved margins.
Financial Performance Shows Sharp Uplift
Carbonxt reported total revenue of $4.6 million for the March quarter. This figure marks a 49.8% rise from the prior quarter. Powdered Activated Carbon (PAC) contributed 52% of total revenue. Gross margins improved to 47%, up from 40% in Q2 FY25.
Customer cash receipts reached $4.1 million, an 87% increase compared to previous quarter. The Company achieved positive EBITDA in each of the quarter’s three months.
Key performance highlights include:
- Activated Carbon Pellet (ACP) sales rose 133% from the previous quarter
- PAC sales increased 23% year-on-year
- $1.5 million in annual cost reductions now fully realised
Strong Demand for PAC and ACP
Carbonxt supplies PAC primarily to waste-to-energy operators and water utilities. Its long-term contract with ReWorld delivered sustained revenue. The four-year, $24 million deal began in October 2024. ReWorld’s deliveries align with tightening U.S. EPA rules on PFAS in drinking water. New federal standards affect over 130 million Americans. PAC and Granular Activated Carbon (GAC) via the Kentucky facility are key tools to meet these regulations.
Carbonxt plans to begin GAC production at its Kentucky plant. This will enable it to expand into liquid-phase treatment. That market is several times larger than the current air-phase focus.
Meanwhile, ACP volumes recovered after customer disruptions earlier in FY25. Shipments resumed as operations stabilised at Carbonxt’s largest pellet buyer.
The Company continues delivering additional orders worth $3.6 million from Wisconsin Public Service (WPS). ACP sales to WPS are expected to remain strong, driven by elevated gas prices and resumed customer operations.
Cost-Based Reduction Boosts Cash Preservation
Carbonxt restructured the lease at its Black Birch PAC plant in Georgia during this quarter. The agreement slashed lease costs by more than 50%. The lessor accepted 7.9 million CG1 shares, issued at a 37% premium to the 15-day VWAP. This will improve cost structure and cash flow while maintaining operational control.
Capital Raised to Support Kentucky Expansion
The Company secured additional funding during the quarter:
- $1 million raised via a Share Purchase Plan (SPP)
- $1.5 million raised through a share placement and convertible notes
The SPP closed on 3 April 2025, raising $739,000 from shareholders. Cornerstone investors covered the $261,000 shortfall. The SPP issued 16.67 million shares at $0.06 per share.
The placement and note facility were finalised on 10 April 2025. Phelbe Pty Ltd and Nanjia Capital Limited supported the raise. Funds will finance the first Kentucky tranche and strengthen working capital.
Murphy Showcases U.S. Growth Strategy at Ignite Summit
Figure 2: Carbonxt Group Managing Director Warren Murphy
Mr. Warren Murphy presented at the Ignite Investment Summit in Hong Kong in March. He outlined the Company’s cleantech strategy and Kentucky facility’s importance. Mr. Murphy reaffirmed Carbonxt’s commitment to the U.S. market.
Mr. Murphy added, “We’re grateful for the continued support of our shareholders through the SPP, placement, and the convertible note raise, which will help accelerate our investment in Kentucky and expand our presence in the growing US water treatment market.”
Outlook for PFAS Market Strengthens
The U.S. activated carbon market is projected to grow at a compound rate of 5%–9% annually through 2030. Demand for PAC and GAC continues to rise due to industrial regulations and PFAS contamination.
Approximately 20–25% of the U.S. demand, equating to 70,000 to 80,000 tonnes annually, is met through imports. China, India, and Sri Lanka are the largest foreign suppliers.
Carbonxt’s U.S.-based production provides a tariff-free advantage. Proposed changes to trade policy may favour domestic producers. A “Buy American” agenda and rising tariffs could shift demand toward local suppliers.
The Company’s cleantech technologies are well-positioned for growth in the water treatment and industrial sectors. The commissioning of the NewCarbon facility will increase production capacity by approximately 200%.
Improved Cash Flow and Reduced Creditors
The Company ended the quarter with $884,000 in cash. Cash receipts and revenue are expected to align going forward. ReWorld’s 60-day payment terms delayed cash inflows this period.
Carbonxt reduced creditor levels by $1 million. This positions the business at the low end of historical liabilities.
Industry Context: Activated Carbon Market Growth
The global activated carbon market exceeded $8 billion in 2024. Water purification and emission control drive demand. Regulatory changes, including PFAS legislation, fuel further growth.
The North American market leads in activated carbon use. U.S. demand is forecast to remain high through 2030. PAC and GAC continue as preferred solutions for environmental compliance.
Carbonxt’s strategic U.S. focus enables competitive supply in a tightening regulatory landscape.
Investor’s Outlook
Carbonxt Group Limited (ASX:CG1) has shown strong investor interest, with stocks trading at $0.054 with a 52-week range of $0.046 – $0.091. The Company’s market capitalisation stands at $22.6 million, positioning it as a key player in the environmental technology sector with a growing footprint in activated carbon production. Investor interest remains strong, given Carbonxt’s unique positioning in the U.S. cleantech sector.
