Why the Carbonxt (ASX:CG1) share price is rocketing 11% higher today

The world is increasingly turning to technology to reduce carbon emissions.

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The Carbonxt Group Ltd (ASX: CG1) share price is rocketing in late morning trade, up more than 11%.

The ASX small-cap company is focused on producing specialised Activated Carbon (AC) products, including Powdered Activated Carbon (PAC) and AC pellets. These are used to help remove toxins and other pollutants created from industrial processes.

Below we take a look at the company's latest sales update.

What update did Carbonxt report?

Carbonxt's share price is soaring today after the company reported it has signed a new US$2 million (AU$2.7 million) contract to supply 1,000 tons of AC Pellets. The pellets will be delivered by the end of December.

The order comes from an existing power station customer in the US state of Wisconsin. Carbonxt will supply the pellets from its Arden Hills facility, located in the neighbouring state of Minnesota. This will see the plant return to full manufacturing capacity.

With the new contract, the Wisconsin power station's total order value has increased from US$3 million to at least US$5 million. The company reports it will realise all the revenue in the current financial year.

Commenting on the new contract, Carbonxt's managing director Warren Murphy said:

This scaled up order from a reliable and long-term customer reflects the steady and progressive revenue growth Carbonxt is now experiencing. To ensure we can reliably deliver the increased tonnage of AC pellets, we have been able to quickly implement new manufacturing processes at Arden Hills that do not compromise product quality or our margins.

With the permit for construction of its plant in the US state of Kentucky pending, and its Arden Hills facility running double shifts, Murphy said, "It is imperative that we commission the planned Kentucky facility in order to capture greater market share and pursue new sector opportunities."

Carbonxt hopes update the market on this "in the very near-term".

Carbonxt share price snapshot

Over the past 12 months the Carbonxt share price remains down 15%, compared to a 22% gain on the All Ordinaries Index (ASX: XAO) over that same time.

With today's intraday gains factored in, Carbonxt's share price has outperformed in 2021, up 22% year-to-date.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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