Papyrus Faces Going Concern Risks Despite Commercial Breakthrough
Papyrus Australia Limited reported a reduced half-year loss and marked a significant commercial milestone with a $4.2 million supply contract, advancing its transition from technology development to early-stage commercialisation.
- Half-year loss narrowed to $839,554 from $1,039,874
- Secured 3.5-year $4.2 million supply contract with TBS Mining Solutions
- Progress on Adelaide Rapid Prototyping & R&D Facility commissioning
- Received $250,000 government grant to support commercialisation
- Leadership changes to bolster governance and commercial capabilities
Financial Performance and Loss Reduction
For the half-year ended 31 December 2025, Papyrus Australia Limited reported a loss after tax of $839,554, a 19.3% improvement compared to the $1,039,874 loss recorded in the prior corresponding period. While the company remains in a net liability position of $27,719, this narrowing loss signals progress as it moves beyond its technology development phase.
Key Commercial Milestone: Collar Keeper® Contract
A pivotal highlight was the execution of a 3.5-year supply contract with TBS Mining Solutions Pty Ltd, a subsidiary of Aquirian Ltd. Valued at approximately $4.2 million, this agreement appoints Papyrus as the exclusive global producer of the fibre-based Collar Keeper® product, with supply expected to commence in the fourth quarter of FY26. This contract not only validates the commercial potential of Papyrus’s biodegradable banana fibre technology but also establishes a clear revenue pathway for the company.
Advancements in Facility and Product Development
Significant progress was made in commissioning the Adelaide Rapid Prototyping & R&D Facility, supported by government and investor funding. The facility is now equipped with prototype moulding equipment and major pulp line components, positioning it as a hub for product prototyping, customer demonstrations, and scale-up planning. Concurrently, Papyrus advanced product testing and validation, refining material consistency and processing parameters to support product diversification.
Support from Government Grants and Funding
The company secured $250,000 under the Australian Government’s Industry Growth Program, matched by investor funding, accelerating equipment procurement and engineering development. This financial support underscores confidence in Papyrus’s innovative banana fibre pulp technology and its potential to disrupt sustainable packaging markets.
Leadership and Governance Enhancements
To support its commercialisation strategy, Papyrus implemented key leadership changes, including the appointment of Daniel Schmidt as CEO and Patricia Vanni as Company Secretary. The board also welcomed Arthur Stavrou, bringing international legal and commercial expertise, while two non-executive directors resigned. These moves aim to strengthen governance and operational capability as the company scales.
Going Concern and Outlook
Despite these advances, Papyrus acknowledges material uncertainty regarding its ability to continue as a going concern, given ongoing losses and net liabilities. However, management remains confident in securing additional funding through grants, loans, and the anticipated revenue from the TBS contract starting mid-2026. The company’s focus now turns to meeting contract milestones and progressing commercial operations.
Bottom Line?
Papyrus’s transition to commercialisation is gaining momentum, but funding and execution risks remain critical in the near term.
Questions in the middle?
- Will Papyrus secure additional funding to fully support commercial scale-up?
- How soon can revenue from the TBS contract materially impact the company’s cash flow?
- What are the prospects for expanding the Collar Keeper® product line or entering new markets?
