Phoslock Environmental Technologies has amended its December 2025 quarterly report to correct funding data and withdraw its sales outlook, while reporting improved cash flow and resuming factory operations.
- Correction of funding availability figure from 40 quarters to N/A due to positive cash flow
- Quarterly cash inflow of $128,000 reversing previous deficits
- Sales volumes surged to 371 tonnes, driven by USA, Brazil, and Europe
- Factory operations restarted in January 2026 after a four-year pause
- Redaction of 2026 sales outlook amid ongoing legal uncertainties
Quarterly Report Amendment and Financial Highlights
Phoslock Environmental Technologies Limited (ASX, PET) has issued an amended December 2025 quarterly report, correcting a previously misstated metric regarding its funding runway. The company initially reported an estimated 40 quarters of funding available, but this figure was revised to 'N/A' following a positive cash inflow for the quarter. This adjustment reflects a healthier cash position than previously indicated, with cash on hand rising slightly to $5.2 million.
The December quarter marked a significant turnaround in operating cash flow, with a surplus of approximately $128,000 compared to deficits in both the prior quarter and the same quarter last year. This improvement was driven by increased customer receipts, which reached $1.095 million; the highest since December 2023; and reduced operating and administrative expenses, notably lower legal and insurance costs after reimbursements from AXA Insurance.
Sales Growth and Operational Resumption
Sales volumes climbed sharply to 371 tonnes in the quarter, a substantial increase from 251 tonnes in the September quarter and just 32 tonnes a year earlier. The growth was led by key markets, the USA accounted for 46% of sales receipts, Brazil 27%, and Europe 19%. For the full year, sales volume surged to 1,200 tonnes, a fivefold increase over 2024, with Brazil representing the majority share at 54%.
Operationally, Phoslock restarted its factory in Changxing, China, on 5 January 2026 after a hiatus since November 2021. The restart has encountered typical challenges, including equipment failures, but production is ramping up towards a capacity of 12 metric tons per day. Meanwhile, research and development efforts continue on an experimental product with enhanced lanthanum content, showing promising initial results despite some technical inconsistencies that need resolution before field trials.
Legal Matters and Outlook Uncertainty
Phoslock is still contending with legacy legal issues, including a class action initiated by the Banton Group on behalf of shareholders. The case remains in the discovery phase, with hearings scheduled for February. The company has chosen to redact its previously stated sales outlook for 2026, citing an inability to disclose the underlying reasons for expected sales growth at this time. This move introduces a degree of uncertainty regarding future revenue projections, despite the operational and financial improvements reported.
Phoslock’s management has expressed commitment to regulatory compliance and defending the company’s interests amid these challenges. The company’s global footprint, with offices and licensees spanning the USA, Brazil, Europe, China, and Australia, positions it well to capitalise on environmental water treatment demand, but the path ahead will require navigating both operational ramp-up and legal complexities.
Bottom Line?
Phoslock’s improved cash flow and production restart signal recovery, but legal and outlook uncertainties remain key watchpoints.
Questions in the middle?
- What are the underlying reasons for redacting the 2026 sales outlook?
- How will ongoing legal proceedings impact Phoslock’s financial and operational strategy?
- Can the production ramp-up sustain the recent sales momentum across key markets?