Clean TeQ Water builds a recurring revenue base from major project wins

Revenue growth arrives with positive operating cash flow

Clean TeQ Water Limited (ASX:CNQ) has moved from proving its technology to delivering larger commercial projects, reporting a 71% increase in revenue to A$19.7 million for FY26 and a sharp improvement in cash generation. Net operating cash flow turned positive at A$0.3 million, compared with an outflow of A$2.9 million a year earlier, while the loss after tax narrowed to A$2.2 million from A$2.8 million.

The balance sheet also strengthened during the year. Cash and deposits stood at A$8.7 million at 30 June, up from A$2.1 million, helped by a A$6.0 million equity placement and the repayment of the company’s A$1.0 million term loan. That progress came with a cost: the company remained loss-making, and its financial report says future performance still depends on project timing, commissioning, customer decisions and the conversion of pipeline opportunities.

Rasp Mine creates the first recurring revenue pathway

The clearest change in the business model came from ATA, Clean TeQ’s tailings dewatering technology. The company won a Design and Construct contract for a 750,000-tonne-per-year plant at Broken Hill Operations’ Rasp Mine, with practical completion targeted for the third quarter of FY27.

After year-end, Clean TeQ signed a long-term polymer supply and technology licence agreement for the same operation. The initial term runs for five years from commissioning and can be extended at the mine operator’s election to as long as 20 years, with licence fees and polymer revenue linked to the volume of tailings processed. The agreement was first highlighted in the Rasp Mine polymer agreement coverage, but the annual report provides the fuller financial and operational setting.

That does not yet make ATA a material recurring earnings stream. Revenue begins alongside plant operation, and the plant still has to be completed and commissioned. But it gives Clean TeQ a commercial template that is less dependent on winning a fresh engineering contract for every dollar of future revenue.

Rio Tinto and Nyrstar expand the contracted project base

Critical minerals and industrial water treatment supplied the year’s largest contract milestones. Rio Tinto awarded Clean TeQ a US$12.5 million, approximately A$19 million, contract for a CLEAN-IX lithium concentrate softening plant at the Rincon project in Argentina. Detailed design progressed during FY26, with major equipment manufacturing under way, marking Clean TeQ’s first major South American deployment.

In Belgium, Nyrstar moved the Balen wastewater project from detailed engineering into a €6.14 million, approximately A$10.4 million, Phase 2 execution contract for a DESALX plant designed to remove sulphate and selenium. Equipment delivery is scheduled through FY26 and into early FY27, making execution and margin control more important than the headline contract value.

Commercial references now span water and uranium

Clean TeQ’s first full-scale PHOSPHIX plant in Ireland completed commissioning and performance testing below 0.1 milligrams per litre of phosphate against a contractual requirement of 1 milligram per litre, while also exceeding its contracted hydraulic throughput. The plant gives the company its first European commercial operating reference for the technology, following the PHOSPHIX European plant performance update.

The company also completed its CLEAN-IX U-Column plant for Heathgate Resources’ Beverley uranium operation in South Australia, with testing meeting or exceeding key recovery criteria. Additional work advanced at Sunrise Energy Metals’ Syerston scandium project and Arafura Rare Earths’ Nolans project, while a paid HIROX pilot with NESR opened another potential route into Middle Eastern industrial water treatment.

FY27 execution will test the commercial thesis

Management’s immediate agenda is unusually concrete for a technology company: deliver the Rasp, Rincon and Nyrstar projects, convert operating reference sites into follow-on work and begin building ATA licence and polymer income. The annual report also records a stronger Syerston relationship, which later developed into a larger FEED contract, captured in the Syerston scandium engineering contract coverage.

There are still financing and execution questions beneath the improved headline numbers. Clean TeQ carried convertible notes with a face value of about A$1.0 million and a December 2026 maturity, while contract assets and receivables increased as project activity expanded. The report identifies project delivery, cost inflation, customer payment timing and further capital requirements as material risks. FY27 should show whether the new commercial references translate into reliable cash conversion, rather than simply a larger order book.