The Novonix Ltd (ASX: NVX) share price is failing to entice buyers on Friday following the release of its FY23 first-quarter report.
Nearing lunchtime, shares in the battery materials company are getting bite taken out of them. At the time of writing, the damage toll is sitting around 3.48%, dragging the share price down to $2.77. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is experiencing its own languishing today, down 0.66%.
The disappointing performance could have something to do with $25 million getting incinerated in Q1.
Let's take a closer look at the details.
Progress at a cost
The sentiment for Novonix shares has soured today amid the company's quarterly activities report. While the anode and cathode materials manufacturer made progress in the three-month period, the price tag for it might be catching investors off guard.
According to the report, Novonix made headway in its development and expansion efforts. For instance, the company completed the installation of an analytical lab to allow materials analysis on-site during the quarter.
In addition, Novonix commenced the installation of equipment that should enable the company to generate 10 tonnes per year of anode materials. The company expects to commission the installation by December 2022.
Another positive, Nononix continued to engage with Samsung SDI and Sanyo — as well as other battery cell and automotive manufacturers — during the quarter. These discussions were centred around capacity planning for future production.
However, the in-roads made during the quarter came at a meaningful cost to the balance sheet. Over the three-month period, Novonix chewed through $25.3 million of cash. The most significant costs were attributed to property, plant, and equipment investments reaching $20.2 million.
A possible antidote to the outflow of capital could be in the works, though, with Novonix nominated to be in the running for a A$240 million grant.
Whirlwind year for Novonix shares
The Novonix share price has suffered a destructive year as excitement for loss-making companies has waned. Since the start of 2022, shares in the company have sunk a colossal 73% — dragging the share price from above $10 to below $3.
Although, anyone who picked up a bundle of Novonix shares in the past month has been rewarded. In the space of a month, the company's shares have soared 58%, mostly due to the recent grant announcement.
