Why the Carbon Revolution (ASX:CBR) share price is sliding

The Carbon Revolution (ASX:CBR) share price is sliding today after the company posted losses in its half year update. Here's the story.

Gretchen Kennedy

Gretchen grew up in a small Connecticut town where she learned to read The Wall Street Journal as part of the grade six enrichment program. She moved to Australia in 2002, earned a Master of Arts (Professional Writing) and went on to spend eight years writing on Wall Street. In June 2018, Gretchen returned to Australia and has since developed a keen interest in all things ASX. In December 2020, she started writing for the Motley Fool. Gretchen's usually writing something, reading a book or chasing her dogs around.

Published February 24, 2021 2:07 pm AEDT

Carbon Revolution Ltd (ASX: CBR) shares are falling today after the wheel manufacturer released its FY21 first-half (1H21) results this morning. In mid-afternoon trade, the Carbon Revolution share price has slumped 4.18% to $2.29.

Here's a wrap of how the company has been performing.

ASX share price slide represented by urban street sign with car sliding — Image source: Getty Images

Carbon Revolution results brief

The Carbon Revolution share price is trending lower after the company reported a 14% reduction in revenue for 1H21. Revenue for the period totalled $17.2 million.

Wheel sales dropped from $18.4 million in 1H20 to $16.6 million in 1H21.

As a result of poor sales activities, Carbon Revolution incurred a net loss of $14.8 million for 1H21, which was an improvement on the $98.6 million loss posted for 1H20.

Earnings per share (EPS) were negative 10 cents for 1H21, an improvement compared to the negative $1.55 EPS of the prior corresponding half.

The company's total assets dropped from $141.7 million in 1H20 to $121.6 million in 1H21. Cash and cash equivalents took a nasty hit, falling from $33.9 million in 1H20 to $15.4 million in 1H21.

In further news driving the Carbon Revolution share price lower, the company did not declare an interim dividend.

Carbon Revolution advised that it is in the process of finalising a new $7.5 million working capital facility.

CEO comments

Carbon Revolution CEO Jake Dingle said that, despite enduring the impacts of coronavirus during the period, he believes the business still reached significant milestones.

Talking about current projects underway, Dingle commented:

The newly developed fascia technology has been commercialised which has dramatically simplified wheel production, driving a reduction in labour cost per wheel and increasing product quality.

The industrialisation program has seen the addition of high-pressure moulding capacity, automated face lay-up conveyor line, multi head fibre placement machine and a second thermal barrier coating cell. These automated manufacturing processes combine advanced physical and digital technologies and are the key building blocks of the Mega-line program.

In conclusion, the business stated that although there are still uncertainties stemming from COVID-19, it expects strong sales growth during the remainder of FY21.

Carbon Revolution share price snapshot

Carbon Revolution designs, manufactures and markets single-piece carbon fibre wheels.

Over the past year, the Carbon Revolution share price has fallen by more than 40%.

Based on the current share price, the company has a market capitalisation of around $339 million with 136 million shares outstanding.

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