Novonix share price powers up on strong quarterly revenue growth

What happened in the March quarter for this battery technology company?

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Key points

  • The Novonix share price is well into the green today, up by more than 3% 
  • The lithium-ion battery technology and materials company has released its March quarter activities and cash flow report
  • Novonix reported continued strong revenue growth and a cash balance of more than $211 million as of 31 March 

The Novonix Ltd (ASX: NVX) share price is well into the green after the lithium-ion battery technology and materials company released its latest quarterly activities and cash flow report.

Novonix operates in the red hot lithium-ion battery space, and it’s also a graphite explorer and miner. Novonix uses graphite to develop anodes for lithium-ion batteries.

At the time of writing, the Novonix share price is up 3.52%, trading at $5.30.

Novonix share price lifts on strong revenue growth

Novonix reported “continued strong revenue growth” with customer receipts of $2.11 million over the quarter. The company said its sales were increasing as it added and grew key strategic customer accounts.

Highlights during the three months to 31 March included:

  • Customer receipts of $2.1 million
  • Cash flow expenditure from operating activities of $22.6 million
  • Cash flow expenditure from investing activities of $27.5 million
  • Cash and cash equivalents balance of $211.8 million as of 31 March
  • Commenced trading on the NASDAQ on 1 February
  • Half-year report released on 25 February.

What happened in the quarter for Novonix

Over the March quarter, the Novonix share price slumped 41%. Meantime, the company was busy signing a couple of major new deals while continuing to develop its production capacity across the board.

Novonix and Phillips 66 signed a technology development agreement to create higher performance, lower carbon-intensive anode material for lithium-ion batteries in North America.

Phillips 66 is a diversified energy manufacturer and a global producer of petroleum needle coke, the key precursor material for synthetic graphite. Phillips 66 bought 77,962,578 ordinary shares of Novonix for US$150 million in September 2021.

Also during the quarter, Novonix spent US$25 million to take a 5% stake in KORE Power, a leading US-based developer of battery cell technology for clean energy industries. The two companies have worked together since 2019 to improve KORE’s battery technology.

Under a new anode material supply agreement, Novonix will become the exclusive supplier of graphite anode material for KORE’s US operations. Deliveries will begin in 2024. It is anticipated that up to 12,000 tonnes of material will be supplied per year. The goal is to strengthen the domestic US lithium-ion battery supply chain.

In Canada, Novonix completed renovations at its new 35,000 square foot site at Burnside. It relocated all hardware and cathode activities from its Bedford site to Burnside.

Novonix received a repayable contribution of $1 million from the Canadian Government to purchase specialised equipment for Burnside, where it will pilot its “cost-effective and environmentally friendly method for cathode material production”. Novonix says it is “on track for a 10 tonnes per annum pilot line to be fully online in Q1 FY23”. The Bedford location is now dedicated to battery assembly and testing.

What’s next for Novonix?

Novonix hopes to take advantage of new US Government funding to support the domestic processing of critical materials, such as graphite for electric car batteries. It is also looking for new international partners for technology partnership opportunities.

In Australia, Novonix said it was continuing to assess opportunities to develop the Mt. Dromedary high-grade graphite deposit asset in northern Queensland.

The Novonix share price is up 116% over the past 12 months compared to a 4.9% gain for the S&P/ASX All Ordinaries Index. However, Novonix has plunged 42.3% in the year to date, while the All Ords has fallen 2.8%.

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. 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 Scott Phillips.

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