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Central Perth Location for WA’s First Public Green Hydrogen Refuelling Station
Frontier Energy Limited (ASX: FHE; OTCQB: FRHYF) (Frontier or the Company) is pleased to announce it has reached an in-principle agreement with the City of Perth for the development of WA’s first publicly available Green Hydrogen Refuelling Station (Refuelling Station).
HIGHLIGHTS
- Frontier Energy and City of Perth to develop WA’s first publicly available green hydrogen refuelling station in West Perth
- Proposed location of refuelling station is approximately 2km from Central Perth
- WA Government has identified domestically produced green hydrogen as a key to reducing WA’s reliance on diesel imports
- There is vast potential for reducing WA’s emissions by replacing diesel and petrol with green hydrogen in transport and bulk haulage
Frontier and the City of Perth have identified and selected a convenient and accessible location for this refuelling station on City of Perth-owned land at Thomas St, West Perth. This location is approximately 2km from Central Perth, near the Mitchell and Kwinana Freeway access points. Hydrogen powered vehicles have faster refuelling times and the ability to travel longer distances carrying larger loads before refuelling.
Development of this refuelling station is subject to final approvals, as well as a Final Investment Decision by Frontier.
Image 1 – Map of Refuelling Station location and surrounding infrastructure
Perth City Lord Mayor Basil Zempilas commented: “Hydrogen-fuelled cars are predicted to grow in popularity over the coming years so having a city-based refuelling station forms an important part of our sustainability plan.
“Frontier Energy is working to become one of the first companies in Australia to produce green hydrogen commercially and will be an important partner for the City as we strive to create a healthy city where environmental, social and economic systems are in balance.”
Frontier Managing Director, Sam Lee Mohan, commented: “The displacement of diesel by hydrogen, most notably in the long haulage industry, is likely to be a major market for hydrogen in the future. Critical to the development of this industry is not only the development of the green hydrogen product, but also the development of critical associated infrastructure such as refuelling stations.
“This initiative aligns with Frontier’s long-term ambition to become a vertically integrated producer across the renewable energy sector, including green hydrogen. The Company would like to thank the City of Perth for its work in arriving at this point and we look forward to developing this exciting project together.”
Using green hydrogen to replace diesel and petrol
Hydrogen can be used as fuel to power Fuel Cell Electric Vehicles (FCEV) including cars, buses, trucks, and trains. Refuelling hydrogen cars, buses and trucks requires a network of refuelling stations, similar to the existing petrol station network.
Benefits:
FCEVs are more efficient than conventional internal combustion engine vehicles and produce no harmful tailpipe emissions. The advantages of hydrogen powered vehicles compared to battery electric vehicles include faster refuelling times and the ability to travel longer distances carrying larger loads before refuelling.
This is perhaps most apparent in long-haul road transportation, which is hugely important to WA’s economy, where the combination of battery weight, extended recharging times and limited range are impediments for purely electric solutions. On each of these factors, FCEVs offer an attractive alternative.
When energy contained in fuel and engine efficiencies are accounted for, hydrogen in a FCEV drive is approximately equivalent to 4 - 6 times diesel on a $/kg basis. This implies that a $8-12/kg hydrogen price is equivalent to a ~$2/kg diesel price (in line with current prices), as measured by equivalent output in a diesel car or a FCEV. Additional premium for zero emissions is likely to accrue to hydrogen used in transport.
Refuelling station technology and FCEV technology is maturing, with stations and fleets being rolled out globally.
WA Opportunity:
Currently, there are no publicly accessible refuelling stations in WA and only a very small FCEV fleet.
Click here for the full ASX Release
This article includes content from Frontier Energy, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Carbonxt Group
Investor Insight
In an increasingly eco-conscious global market, Carbonxt makes a compelling investment case leveraging a current, approximate US$900 million addressable market, driven by a strategic joint venture that presents strong revenue and growth potential. This addressable market is anticipated to grow three to five fold to more than US$2 billion following the introduction of new rules to capture forever chemicals.
Overview
Activated carbon is typically derived from sources such as coconut husks and coal, and is among the most common ways to filter contaminants from both water and air.
Activated carbon is so named because the process by which it's produced oxidizes the carbon, 'activating’ a series of small, low-volume pores that considerably increase its surface area. There are a few different methods for producing the material, including carbonization, gas treatment and chemical treatment. It is also invaluable for a wide range of use cases across multiple industries, including healthcare, chemistry, agriculture, oil & gas and even food preparation.
For large-scale industrial use cases, activated carbon typically comes in one of three forms: powdered, pellet and granular. Depending on how the material is treated post-oxidation, activated carbon can be tailored to a multitude of individual use cases. For large-scale use, material cost can range from US$2,000 per tonne to as high as US$6,000 per tonne, presenting a considerable opportunity in activated carbon.
Carbonxt Group (ASX:CG1) is positioned to take full advantage of that opportunity. An innovative manufacturer of custom activated carbon, Carbonxt has locked in a joint venture with US-based partner Kentucky Carbon Processing, forming the joint venture NewCarbon, and effectively expanding Carbonxt’s addressable market and gross margin.
Much of this growth will be courtesy of a new Kentucky facility focused primarily on water treatment. This facility will leverage two pieces of legislation recently announced in the United States — the Environmental Protection Agency's (EPA’s) Clean Water Act and the Bipartisan Infrastructure Deal. The former aims to reduce pollution caused by polyfluoroalkyl substances (PFAS), while the latter provides a total of $10 billion in funding to help companies reduce PFAS contamination.
PFAS are a set of widely-used chemicals that take an incredibly long time to break down. Found in soil, water, air, fish and humans, multiple studies have linked PFAS to severe health problems, which include birth defects, developmental delays, thyroid disease, high blood pressure and increased risk of several types of cancer.
It’s why the EPA is cracking down hard on these chemicals, with additional regulations being proposed to further protect communities from the serious effects of PFAS. These regulations, which are set to begin enforcement between 2024 and 2028, will require the majority of companies in the water industry to upgrade their filtration systems.
Carbonxt provides products specifically targeting PFAS removal. Through the NewCarbon joint venture, the company intends to convert a waste-to-energy plant into an activated carbon plant, considerably increasing its production capacity and allowing it to directly serve the roughly 50,000 water utilities in the United States, which together account for roughly 50 percent of the granular activated carbon market.
If all goes as planned for Carbonxt, it will fully disrupt that market, unseating the current leader.
Company Highlights
- Carbonxt Group is a manufacturer of patented activated carbon products designed to treat toxic pollutants in both air and water. For example, Carbonxt Group has been awarded a US$159,000 (AU$240,000) research grant by the Florida state government to advance a groundbreaking water remediation study to combat the negative impacts of algae growth on coastal communities.
- Carbonxt currently has an addressable US market of US$290 million with a 5 percent market share. Its joint partnership with Kentucky Carbon Processing has the potential to increase this addressable market to more than $900 million.
- Together, Kentucky Carbon Processing and Carbonxt will form the joint venture company NewCarbon, affording Carbonxt several advantages:
- Increased US-based production capacity to over 20,000 tons per annum with the potential for further expansion.
- Control over input costs, considerably improving base margins.
- High-quality raw materials.
- In the near future, much of Carbonxt's growth will be driven by the United States Environmental Protection Agency's increasing regulation of PFAS.
- There are currently 50,000 water utility companies in the United States, 4,000 of which serve 10,000 or more customers. Collectively, they account for roughly 50 percent of the granular activated carbon market with annual expenditures of over US$300 million.
- Carbonxt is well-positioned to serve these companies, providing activated carbon pellets that offer improved filtration with a lower pressure drop as a replacement for granular activated carbon.
- In addition to a highly experienced leadership team, Carbonxt’s strong revenue and earnings growth potential from NewCarbon make the company an attractive investment prospect.
Core Product
High-performance Activated Carbon
Carbonxt designs specialized activated carbon products for its customers, which consist primarily of industrial sector organizations and power utilities. Available in pellet and powder form, the company's oxidizing, non-brominated activated carbons are non-corrosive and designed to remain efficient throughout their entire lifecycle. Although Carbonxt’s origin and listing is in Australia, its products are manufactured and distributed exclusively within the United States.
Carbonxt is currently focused on developing an activated carbon manufacturing facility in Kentucky, the result of a joint partnership with Kentucky Carbon Processing. Once this facility is operational, water utility companies are expected to form a much larger part of its customer base. The facility is also expected to re-invigorate the company's industrial pellet market sales.
Highlights:
- Strong Market Outlook: Industry demand for powdered and pelletized activated carbon remains strong. Prices have trended considerably upwards over the past year and will likely continue to do so for the foreseeable future.
- Pricing Trends: Carbonxt's primary competitors in the activated carbon market have both announced price increases ranging from 15 to 40 percent. The company's activated carbon products have the potential to offer better filtration at a considerably lower price point.
- Looking Up: Carbonxt has also recently improved its existing carbon manufacturing facilities. This has translated to a more than 20 percent increase in gross margins in the last financial year, with further double digit percentage gains expected in FY24.
- Making a Good First Impression: Carbonxt's high-specification sample products have been well-received by end customers. Management is currently in talks with numerous water utilities to purchase capacity from the company's new facility once it comes online.
- Use Cases: Carbonxt currently manufactures activated carbon products for the following:
- Powdered activated carbons for mercury and flue gas component removal. Customers for this use case include coal-fired power plants, cement plants and industrial boilers & incinerators. Carbonxt manufactures a specialized activated carbon for each type of customer.
- Pelletized activated carbon for the removal of VOCs and hydrogen sulphide from gas streams.
- High-quality pelletized activated carbons designed to remove drinking water contaminants as well as taste and odor compounds.
- Contract Agreements: Carbonxt has secured a $4.3 million purchase order for activated carbon (AC) products from US utility Wisconsin Public Service. The company also secured a four-year contract extension to supply premium PAC products to Reworld, a global leader in sustainable waste solutions. The deal will generate group revenues of approximately $6 million per annum for the duration of the contract.
Management Team
David Mazyck – President, NewCarbon (the Kentucky JV) and Director of Technology
Dr. David Mazyck is a world-leading expert on activated carbon (AC) and its applications including mercury capture. He has developed AC products for major multinational AC manufacturers and has regularly consulted them on technical issues. Mazyck is the former chairman of the Activated Carbon Standards Committee for the American Waterworks Association and has developed products for NASA.
He received his PhD in environmental engineering from Penn State University, where he also earned a PhD minor in fuel science.
Matthew Driscoll - Chairman
Matthew Driscoll has significant experience across several industries, including online technologies, financial services, fintech, cleantech, property and resources. He has more than 30 years’ experience in capital markets and the financial services industry and is an accomplished company director in roles across listed and private companies.
He has significant experience in international business growth, mergers and acquisitions, equity and debt raisings and building strategic alliances. His current directorships include NED Energy Technologies, NED Blina Minerals, NED Eco Systems, and NED Smoke Alarms Holdings.
Warren Murphy - Managing Director
Warren Murphy has led a large number of acquisitions and financings across the energy, resources and infrastructure sectors. This includes the development of over 2,000 MW of Greenfields power stations and the acquisition of over 3,000 MW of generation assets.
He was co-head of the Australian Infrastructure & Project Finance Group and Head of Energy at Babcock & Brown based in the Sydney office and led the development of Babcock & Brown’s energy sector capability in Australia and New Zealand, including the founding of Infigen Energy and its unlisted predecessor, Global Wind Partner, where he served as a director from inception until June 2009.
Murphy was also a director of the ASX-listed Alinta and Sydney Gas, as well as the unlisted Coogee Resources.
Dr. Regina Rodriguez - Senior Executive
Dr. Regina Rodriguez has a PhD from the University of Florida, where she received the prestigious National Science Foundation Graduate Student Fellowship. She was the chairperson of the Activated Carbon Standards Committee for the American Waterworks Association.
Rodriguez holds nine patents. Her leadership has resulted in one-of-a-kind sorbents and systems for power stations and water treatment.
Imtiaz Kathawalla – Independent Director
Imtiaz Kathawalla was a vice-president at NYSE-listed Cabot Corporation, a global specialty chemical company where he had a 27-year career. Kathawalla's most recent position with Cabot Corporation was as general manager of Cabot's purification solutions division. He ran the group's US$300-million global activated carbon business where he oversaw a material increase in EBITDA before managing the sale of the business to a large private equity group.
Nicholas Andrews – Independent Director
Nicholas Andrews has held the role of executive chairman and CEO at Magontec (ASX:MGL), an established business in the global magnesium sector. He is a member of the executive committee and serves on the board of the International Magnesium Association. Prior to his executive career, Andrews held several senior roles in the financial services sector across both investment management and investment banking.Completion of Capital Raising
Provaris Energy Ltd (ASX.PV1, Provaris, the Company) is pleased to announce that it has received firm commitments to raise $1.5 million (before costs) via a share placement to institutional, sophisticated, and professional investors at $0.02 per share, with 75 million new fully paid ordinary shares to be issued (Placement).
HIGHLIGHTS:
- $1.5 million raised from a well subscribed Placement with cornerstone support received from existing and new institutional and corporate investors.
- Funds will be applied to Provaris’ business development activities in Europe for both hydrogen and CO2, and preparations for the future restart of its prototype tank program.
- Strong support from Directors, subscribing for $125,000.
- Amendment to 2024 AGM Notice of Meeting (refer to page 2).
Provaris Managing Director and CEO, Martin Carolan, commented“The Company is delighted with cornerstone support from a new Australian institution and international corporate investor in the Placement, and we also thank the ongoing support from existing major shareholders.
Provaris continues to advance the commercial and technical steps required for compressed hydrogen to be recognised as an enabler for regional production, storage and transport of bulk-scale hydrogen into North West Europe, addressing the industry challenges of cost, complexity and efficiency.
The recognition of our unique and proprietary solutions for storage and marine transport of gases is also creating early stage commercial pathways in the established CO2 shipping sector where the introduction of higher-volume CO2 tanks and ships can reduce the storage and shipping costs.”
Placement Details
The Placement will comprise the issue of 75 million new fully paid ordinary shares (New Shares) at an issue price of $0.02 per share, which represents a 5% discount to the last trade and a 10% discount to the 30-day Volume Weighted Average Price as at 1 November 2024.
The Placement will settle in one tranche with the New Shares to be issued under the Company’s existing ASX Listing Rules 7.1 and 7.1A placement capacity. Settlement of the Placement is expected to occur on Tuesday, 12 November 2024 and the New Shares will rank equally with the Company’s existing fully paid ordinary shares on issue.
The Company notes that the Directors of the Company have elected to participate in the Placement, subscribing for a total of $125,000. The issue of New Shares to Directors will also be subject to shareholder approval at a future planned EGM.
Bridge Street Capital Partners acted as Lead Manager to the Placement.
Click here for the full ASX Release
This article includes content from Provaris Energy, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Carbonxt Group Limited – Update – Appendix 4C
Following the release of Carbonxt Group Ltd’s (ASX:CG1) (“Carbonxt” or “the Company”) Appendix 4C Report for the September 2024 Quarter on 31 October 2024, it has come to the Company’s attention that there was an error in section 8.
The attached Appendix 4C has been updated to correct the figure in section 8.5 and provide responses to the questions in section 8.6.
This announcement has been authorised for release to ASX by the Board of Directors of Carbonxt Group Limited.
Click here for the full ASX Release
This article includes content from Carbonxt Group, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Is Trump a Threat to US Electric Vehicle and Battery Supply Chain Growth?
Electric vehicles (EVs) are key to cutting greenhouse gas emissions and fighting climate change, and the Biden administration has implemented subsidies and tax incentives to foster US and North American supply chains.
Nearly US$1 trillion is flowing into various initiatives via the Bipartisan Infrastructure Deal, CHIPS and Science Act and Inflation Reduction Act (IRA). The aim is to boost economic and tech development while supporting clean energy.
More specifically, the Bipartisan Infrastructure Deal invests in upgrading US infrastructure, including roads, bridges, public transit and broadband internet. Meanwhile, the CHIPS and Science Act promotes US semiconductor manufacturing and research to reduce reliance on foreign suppliers, and the IRA focuses on reducing the deficit, lowering drug costs and investing in clean energy to combat climate change.
On the EV side, US$2 billion in funding is being directed toward the Department of Energy to provide grants for domestic production of various types of clean vehicles, from hybrids to hydrogen fuel cell cars. There are also critical minerals manufacturing subsidies and several consumer incentives, including a US$7,500 tax credit on new EV purchases.
In this article
How would a Trump presidency impact the EV sector?
As the US election approaches, with Republican candidate Donald Trump set to square off against Democrat Kamala Harris on November 5, speculation is rife about whether Trump would end EV incentives.
In an August 20 interview with Reuters, the presidential candidate expressed his disdain for tax incentives.
"Tax credits and tax incentives are not generally a very good thing," Trump said. "I'm not making any final decisions on (EV tax credits). I'm a big fan of electric cars, but I'm a fan of gasoline-propelled cars, and also hybrids and whatever else happens to come along."
However, battery sector experts at Fastmarkets' Lithium Supply and Battery Raw Materials conference agreed it would be extremely difficult for Trump to repeal any or all of the three initiatives.
“What can Trump legally change if he becomes president with the IRA?” Grace Asenov, base metals and energy editor at Fastmarkets asked rhetorically during her presentation at the event. “The quick answer is he is not going to be able to change very much. The IRA is law; anything that the treasury department does through regulation can be changed, but it would take a lot of time, and it would have to be done in a legally defensible way."
Even so, analysts at the Fastmarkets event believe that while changing the IRA and other legislation would be difficult, a Trump presidency would have a negative impact on EV sector growth. During a scenario analysis, they concluded that another Trump term could have three major implications for EV battery-related policies.
First, Trump may impose stricter regulations on which EV models qualify for subsidies under the IRA, limiting eligibility for the US$7,500 tax credit. Second, his administration could eliminate Environmental Protection Agency vehicle emission standards that are expected to lead to 67 percent of vehicles being electric by 2032. Lastly, Trump might roll back commitments for 50 percent of the government fleet to be electric by 2030.
“If implemented, these changes could result in 5 percent lower EV sales by 2034,” Asenov said.
Has Elon Musk's support affected Trump's stance on EVs?
Although Trump has ridiculed EVs in the past, a friendly relationship with Tesla ( NASDAQ:TSLA) CEO Elon Musk has appeared to soften the former president’s stance.
“I’m for electric cars. I have to be, because Elon endorsed me very strongly. So I have no choice,” he told reporters in August.
Like Trump, Musk has also been outspoken about his disdain for EV subsidies and tax incentives, although Tesla has benefited from nearly US$3 billion in government subsidies since its inception.
In addition to endorsing the Trump campaign, the Tesla founder has also appeared at several Trump rallies in swing states.
Musk also launched a controversial voter sweepstakes in mid-October that offered US$1 million daily to participants who confirm their voting status on a designated website. The lottery, which also required voters to sign a petition in “support of the 1st and 2nd amendments," was quickly paused after the Department of Justice warned Musk that the incentive could violate US election laws prohibiting payments in exchange for voting.
Will Trump try to compete with China on EVs?
If Trump does want to see the EV and battery supply chain grow in the US, he may implement stronger restrictions on Foreign Entity of Concern nations, including China, which dominates the processing of lithium, rare earths and several other critical minerals. China is also the top producer of rare earths and other important commodities.
“He could say, 'We don't want to rely on China at all (for critical minerals and battery processing and manufacturing),'” said Asenov, noting that such a decision would slow EV adoption.
Trump’s aversion to Chinese reliance was also brought up during a panel discussion at the Fastmarkets event.
“I don't think he wants to lose to China on the manufacturing of EVs,” Howard Klein, cofounder and partner at RK Equity, said. “I'm relatively optimistic that whoever wins will not make major changes,” he added, noting that southern states have benefited from the subsidies — the same states where Trump has a large base.
How could the IRA be improved?
With the outcome of the US election still very much up in the air, the Fastmarkets experts spent time sharing ideas on how the IRA and other legislation in the country could be changed for the better.
Steve LeVine, editor of the Electric, would like to see some collaborative measures implemented.
“Who's the world expert in making batteries and making the chemicals, making the components? It is the Chinese. So if I were to change any part of the IRA, it would be an incentive to bring Chinese expertise into the US to teach Americans how to do that," he told attendees at the Fastmarkets event.
Asenov noted that Trump could look to close the US$7,500 credit loophole for leased vehicles through which consumers can lease an EV, get the incentive and then return the car after three years.
For his part, Klein said he would like to see more investment in mineral extraction and production.
“More money for mining. There is a lot of funding in the IRA, but no money for mining, just processing,” he said.
Klein went on to note that allocating money for mining could “change the mentality” around the sector and send a positive message to the public about the often-maligned industry. Whether added to the IRA or adopted as standalone investment, the need to secure new and grow existing mined supply is a crucial first step in EV sector growth.
Indeed, the International Energy Agency notes that demand for minerals used in EVs and battery storage is set to grow at least 30 times by 2040 in climate-driven scenarios.
While investment in new mine supply, processing and manufacturing were agreed to be imperative, where that money comes from caused some division amongst the panelists.
As Klein called for IRA funding, David Deckelbaum, analyst at TD Cowen, took a more “cynical view” of the IRA.
“I don't think (the IRA is) very pragmatic,” he said. “My criticism would be, especially as you look at the capital flows and attracting capital and investments, investors do not want to invest in something that requires infinite supplementation.”
Deckelbaum went on to explain that he agreed with LeVine’s point, and suggested removing China from the "economy of concern" list to allow materials from China to qualify for investment tax credits.
This would also involve increasing consumer credits and eliminating income limits to boost adoption.
"We should focus on creating demand domestically, rather than imposing restrictions on how manufacturers meet it. Since it's not feasible to avoid buying materials from China, and investors are reluctant to support companies that can't compete without government aid, the current approach isn't sustainable," he said.
Does Harris support an electric vehicle mandate?
Kamala Harris stated that she does not support an electric vehicle mandate at an October campaign stop in Flint Michigan — the epicenter of American automotive production. The presidential hopeful told supporters, “I will never tell you what kind of car you have to drive.”
She clarified her stance after the Trump campaign falsely claimed in ads that Harris would implement an electric vehicle mandate forcing US automakers to only produce electric or hydrogen vehicles by 2035.
Instead, Harris promised to invest in “retooling” existing facilities in order to capitalize and benefit from the clean energy shift and support companies to hire locally.
A Harris administration will likely lead to the continuation of Biden-era policies supporting electric cars, including the IRA and EV supply chain funding. She has also been vocal about her support of EV adoption, national clean energy goals and subsidies to encourage US-based EV production, as part of a larger goal of reducing carbon emissions and strengthening domestic supply chains.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
Carbonxt Group Limited – September 2024 Quarterly Update
Carbonxt Group Ltd (ASX:CG1) (‘‘Carbonxt” or “the Company”) has released its Appendix 4C Report for the September 2024 Quarter and provides the following update on the key areas of activity for the period -- all numbers are in A$.
Highlights
- 4-year, $24m contract extension for the ongoing supply of premium PAC products to Reworld – an existing Carbonxt customer. Post quarter-end, Carbonxt commenced full-scale delivery of additional PAC volumes to Reworld from its Black Birch facility, in accordance with the contact terms.
- Quarterly revenue of $4.3m, with Powdered Activated Carbon (PAC) sales up 31% and Activated Carbon Pellets (ACP) sales up 27%, driven by increased demand from the power generation sector.
- Successful completion of a $3.02m capital raise, via the placement of 46.4m fully paid ordinary shares at $0.065 per share which was strongly supported by a network of sophisticated and high net-worth investors and family offices.
- Carbonxt made a further $0.625m investment in NewCarbon Processing, LLC (“NewCarbon”), the investment vehicle for the new state-of-the-art AC production facility in Kentucky jointly held with Kentucky Carbon Processing, LLC (“KCP”), with a further $0.625m to be completed in this quarter.
- Key construction works at the flagship Activated Carbon production facility in Kentucky were completed in the quarter; commissioning of the plant is now imminent with business development and operating processes being ramped-up.
Principal Activities
Carbonxt is a cleantech company that develops and manufactures environmental technologies to maintain compliance with air and water emission requirements and to remove harmful pollutants. The Company’s primary operations are in the US and include a significant R&D focus as well as manufacturing plants for activated carbon pellets and powder activated carbon. Carbonxt continues to expand its pellet product portfolio to address numerous industrial applications.
Managing Director Warren Murphy commented:
“The September quarter was highlighted by continued momentum across all our key growth drivers, with increased sales from existing operations complemented by the forthcoming commissioning of our state-of-the-art production facility in Kentucky.”
“With commissioning of the Kentucky facility now imminent, Carbonxt continues to execute on its strategy to deliver a step-change in growth and earnings, significantly scaling up its production capacity to meet the growing demand for premium Activated Carbon production in the US market.”
Overview
- Customer receipts for the quarter were $1.8m. As noted in the ASX announcement of 28 May 2024, Wisconsin Public Service (“WPS”) pre-paid for the volume delivered in this quarter. The pre-payment amount was received in the previous quarter and associated volumes have now been delivered in full. New business in the waste to energy market (see announcement of 17 October 2024) commenced on 1 October 2024 and these increased revenues will be seen the next quarter.
- Activated Carbon Pellet (ACP) primary sales during this period were higher by 27% for the quarter compared to last quarter as the WPS pre-paid volumes were delivered.
- Powdered Activated Carbon (PAC) revenue was 31% higher this quarter as compared to the prior quarter due to seasonally higher PAC usage in the summer by electricity utility customers.
Revenue and Operating Cash Flow
- Total revenue for the quarter was $4.3m with PAC sales contributing to 42% of this revenue. To mitigate the impact of seasonal fluctuations, which are a feature of the power generation sector, the Company continues to diversify its product offerings and expand into other markets, particularly in the water and wastewater sectors.
- As noted earlier, the Net Operating Cash for the quarter reflects the prepayment for 1,200 tons of ACP products from WPS in the prior quarter, with production and revenue recognition largely in this quarter.
- Revenue and cash receipts from the $6m p.a. contract extension with Reworld will be recognised in the December quarter, following the completion of first deliveries in October.
Figure 1 – Quarterly Net Operating Cashflows
Further Investment in NewCarbon
Carbonxt utilised part of its recent fundraising (see below) to meet the next instalment of its investment in NewCarbon. The total instalment is US$1.25m, with US$0.625m made in the quarter, with the remaining balance expected to be made by 15 November 2024. Carbonxt’s ownership stake in NewCarbon at the end of this September quarter is 38%.
Click here for the Appendix 4C
Click here for the full ASX Release
This article includes content from Carbonxt Group, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Energy Technologies Limited 1Q FY2025 Quarterly Activities Report and Appendix 4C
Energy Technologies Limited (ASX: EGY), is pleased to release its Quarterly Activities Report and Appendix 4C Quarterly Cash Flow Report for the period ended September 2024 (“1Q FY2025”).
Key highlights:
- Quarterly cash receipts of A$3.2m, up 23% on June 2024 Quarter;
- Net Cash operating outflows of $1.28m, a 52.6% improvement on June 2024 Quarter;
- Renewable Energy Division becomes operational and records initial sales receipts of $328k;
- Wholesale product agency/distribution agreement with Tratos Group finalised and implemented within the Purchased Sales Division;
- On 12 September 2024, announced a non-renounceable pro-rata rights issue to eligible shareholders to raise up to c. $12.7 million; and
- $6.00m line of credit secured to support continued execution of the revised business plan including anticipated growth of the Renewable Energy and Purchased Sales divisions.
The increased cash receipts and continued execution in respect of the previously announced revised business plan contributed to a significant reduction in 1Q FY2025 net cash operating outflows to $1.28m, a 52.6% improvement over the June 2024 Quarter.
The revised business plan re-focuses the Company from being predominantly concerned with the manufactured sales of specialised low voltage wires and cables to a broadening of commercial pursuits comprising:
- adopting strict financial margin metrics for the Manufactured Sales Division, whereby – absent a compelling commercial rationale - low margin production orders are transferred to the Purchased Sales Division;
- the commissioning of the of the Renewable Energy Division, which currently comprises the recently announced wholesale distribution agreement with the Gantner Group; and
- the establishment of the Purchased Sales Division with the recently announced wholesale distribution agreement with the Tratos Group, which now enables EGY to offer the complete suite of medium and high voltage wires, cables and allied products.
As a consequence of the continued execution of the transformative business plan, EGY not only enjoyed its first sales from the Renewable Energy Division during 1Q FY2025 but importantly has been able to confidently commence tendering in this sector supported by the recent:
- procurement of a $6.00m line of credit; and
- launch of the c. $12.7m non-renounceable pro rata rights issue.
With the forgoing initiatives, EGY can now comfortably meet any working capital requirements arising from its’ enhanced business activities. In this respect the Board reserves the right to place the rights issue shortfall as the working capital requirements dictate.
EGY CEO Nick Cousins commented: “We are currently pursuing a range of tenders that extend beyond revenue opportunities in our Renewable Energy Division. EGY is strategically positioned to enhance revenue growth in both the Purchased Sales and Manufactured Sales divisions. Our ability to provide comprehensive solutions across low, medium, and high voltage wires, cables, and related products will enable us to capitalise on these opportunities effectively”.
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