Carbonxt Group ASX CG1 riding high on US economic recovery tailwinds |
Posted: December 22, 2021 |
Highlights
ASX-listed cleantech company Carbonxt Group Limited (ASX:CG1) continues to witness encouraging developments amid the ongoing economic recovery in the United States. The widespread and successful rollout of vaccination programs has allowed the States to open up, offering a favourable landscape for Carbonxt's growth. As a result of the buoyant economic momentum, the use of Powdered Activated Carbon (PAC) edged up in late FY21 in the power generation sector. This boded well for an increase in 1H FY22 revenue, said CG1 Chairman and Managing Director Warren Murphy at the recent Annual General Meeting. CG1 develops and markets specialised activated carbon products, catering to the wastewater treatment, industrial air purification, and other liquid and gas phase markets. RELATED ARTICLE: Carbonxt Group clocks 81% increase in September quarter customer receipts Building self-reliant AC pellet capabilitiesWith the utilisation of a third-party, high-surface area carbon in industrial AC pellets impacting gross margins, Carbonxt was quick to suspend the production of industrial AC pellets at the Arden facility. As a result, the Company reduced US$1 million per annum from its operating costs. What's more, the Company now does not depend upon third-party carbon and uses its unrivalled R&D expertise to create new AC pellet formulations. Carbonxt has also agreed to a commercial partnership with Kentucky Coal Processors, LLC, which would fund and build a 5,000-ton AC pellet manufacturing facility at its Kentucky operations in the US. The construction work is anticipated to commence shortly, with the production of industrial AC pellet products expected in 2H FY22. In addition, Carbonxt has continued to develop kiln-activated carbon based on its Black Birch material. It will provide another raw material source for the Company’s industrial and specialised AC pellets over the near term. Continued R&D initiatives power new developmentsThe Company continued to invest in R&D despite difficult trading conditions in FY21. One of the significant accomplishments includes the development of a new AC pellet technology for the water industry, which is well-suited for high humidity applications. ALSO READ: Carbonxt (ASX:CG1) to tap water & wastewater treatment space with AC pellet technology The Company is engaged in developing its HydRestorTM technology that can limit the consequences of nutrient run-off in water bodies. Given the specific regulation passed by the State of Florida, which targets the alarming impacts of these chemicals, highly promising early results from commercialisation tests could prove significant for the Company. Source: CG1 Investor Presentation, dated 30 September 2021 ALSO READ: Carbonxt Group (ASX:CG1): A high-growth cleantech company with robust revenue potential Positive recovery and environmental commitments paint a bright outlookSubsequent to FY21, the Company saw an uptick in orders from an AC pellet customer, which is likely to boost revenue further by AU$3 million. As a result, revenue growth is expected to continue at the same rate for the foreseeable future. It is an exciting time to be a cleantech company focused on improving air and water quality, especially when US President Biden supports a strong environmental agenda. Carbonxt is committed to establishing itself as the leading US supplier of AC pellets. RELATED ARTICLE: What’s behind Carbonxt’s (ASX:CG1) bright prospects in the US cleantech market? CG1 shares were trading at AU$0.245 midday on 29 October 2021.
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