De.mem’s 15% Annual Cash Receipts Growth Outpaces Water Sector Average

Record Cash Receipts and Sustained Growth Momentum

De.mem Limited (ASX: DEM), an industrial water and wastewater treatment company, has reported its December quarter 2024 results, highlighting record cash receipts of approximately $7.43 million. This marks the second highest quarterly cash intake in the company's history and extends De.mem's impressive streak to 23 consecutive quarters of cash receipts growth compared to the prior corresponding period.

For the full calendar year 2024, De.mem achieved cash receipts of $28.44 million, representing a robust 15% increase over 2023. This growth rate notably outpaces the broader water technology sector, which averages around 3.5% annual growth, underscoring De.mem's strong market positioning and operational execution.

Positive Operating Cash Flow Signals Financial Health

Alongside revenue growth, De.mem reported positive net operating cash flows of $533,000 for the December quarter, following $82,000 in the September quarter. This positive cash flow trend culminated in a full-year net operating cash flow of $51,000, a significant turnaround from negative cash flows in prior years. The improved cash flow is attributed to strong performances from the Australian and German operations and disciplined investment in Singapore-based membrane technology development.

Strategic Acquisitions and Product Innovation Drive Margins

The company successfully integrated two acquisitions, Border Pumpworks and Auswater Systems, during 2024, which contributed approximately $1.28 million in cash receipts in the second half of the year. These acquisitions have expanded De.mem's footprint in regional Victoria, New South Wales, and Western Australia, particularly servicing industrial and mining sectors.

De.mem's focus on high-margin, recurring revenue streams is reflected in its record gross margins of 40% in the first half of 2024, surpassing the industry average. This premium positioning is supported by proprietary technologies, including the recently NSF-certified Graphene Oxide enhanced membrane. This next-generation membrane technology offers up to 40% higher water throughput, reducing operating costs and enhancing filtration efficiency.

Commercial Launch and Market Expansion

De.mem has commenced the commercial launch of its Graphene Oxide enhanced membranes for domestic water filtration applications, targeting the North American market through a partnership with Purafy Clean Technologies. Early revenues have been promising, with expectations to exceed $1 million over two years. The company is also exploring growth partnerships in Southeast Asia, including Indonesia, Malaysia, and India, aiming to capitalize on the expanding global domestic water filtration market projected to reach US$26.7 billion by 2030.

Outlook and CEO Commentary

Looking ahead, De.mem anticipates sustained double-digit organic growth in 2025, underpinned by approximately 90% recurring cash receipts and further contributions from recent acquisitions and new product lines. CEO Andreas Kroell expressed optimism, highlighting the achievement of positive full-year operating cash flow as a key milestone and reinforcing confidence in continued growth driven by innovation and strategic expansion.