Carbonxt Advances Kentucky Facility, Boosts PAC Sales and Raises $1M Capital
Carbonxt has marked a pivotal quarter with the mechanical completion of its Kentucky activated carbon plant, a 14% rise in powdered activated carbon sales, and a successful $1.03 million capital raise, setting the stage for stronger revenue growth in 2025.
- Kentucky facility reached mechanical completion in December 2024
- Powdered Activated Carbon (PAC) sales increased 14% year-on-year
- $1.03 million raised through share placement to support growth
- Operating expenses cut by $1.5 million annually to improve cash flow
- New contracts with Wisconsin Public Service and ReWorld secured
Operational Milestone Achieved
Carbonxt Group Limited (ASX:CG1) has announced the mechanical completion of its Kentucky activated carbon production facility as of 18 December 2024. This milestone is a significant step forward for the US-focused cleantech company, positioning it to capitalize on growing demand for activated carbon products, particularly in emerging markets such as water treatment.
The Kentucky plant's readiness aligns with Carbonxt's strategic focus on expanding its pellet product portfolio and scaling production capacity to meet industrial demand. The company is currently finalizing operational ramp-up activities, including optimizing coal processing and completing high-temperature wiring installations.
Sales Growth and Contract Wins
During the December quarter, Carbonxt reported a 14% increase in Powdered Activated Carbon (PAC) sales compared to the prior year, driven by new waste-to-energy contracts commencing in December 2024. PAC sales now account for 68% of total revenue, underscoring the product's growing importance to the company's revenue mix.
While Activated Carbon Pellet (ACP) sales declined 32% year-on-year due to timing differences related to Wisconsin Public Service's (WPS) prior prepaid volumes, the company expects a strong recovery in ACP sales in upcoming quarters. Carbonxt has secured additional purchase orders from WPS valued at $3.6 million for the second half of FY25, alongside a $24 million, four-year contract with ReWorld that began in October 2024 and is expected to contribute $3.6 million in H2FY25 revenues.
Financial Discipline and Capital Raising
Carbonxt has successfully raised $1.03 million through a share placement at 6 cents per share, accompanied by unlisted options exercisable at 10 cents. This capital injection supports the company’s operational expansion and working capital needs.
Importantly, the company has implemented cost reductions amounting to $1.5 million annually, which are expected to ensure positive cash flow in forthcoming quarters. Lease restructuring initiatives are also underway to deliver further efficiencies by March 2025.
Strategic Investments and Outlook
Carbonxt increased its stake in NewCarbon Processing, LLC to 40.3% with a US$1.25 million investment during the quarter, retaining options to increase ownership to 50%. This investment complements the Kentucky facility’s ramp-up and is expected to enhance operational cash flows materially.
Managing Director Warren Murphy highlighted the company’s disciplined approach: "Our focus on cost management and strategic market positioning ensures we are well-placed for stronger revenue growth in 2025. With increasing demand for activated carbon solutions, particularly in waste-to-energy and water purification sectors, we remain committed to delivering value for our shareholders."
Looking ahead, Carbonxt’s immediate priority is to bring the Kentucky plant to full operational capacity, which will be a critical driver of revenue growth. The company’s expanded contracts and cost efficiencies position it well to capitalize on regulatory trends targeting mercury and PFAS contamination.
Bottom Line?
With its Kentucky facility operational and new contracts in place, Carbonxt is poised for a transformative 2025, but execution risks remain as production scales.
Questions in the middle?
- How quickly will the Kentucky facility ramp up to full production capacity?
- What impact will the increased stake in NewCarbon have on Carbonxt’s financials and operations?
- Can Carbonxt sustain its cost reductions while scaling production and sales?
