Entyr Reports 929 Tonnes of Tyre Receivals and $913K Operating Costs in Q2

Operational Momentum Builds

Entyr Limited (ASX: ETR), an environmental technology company specialising in waste tyre recycling, reported a notable increase in tyre receivals during the December 2024 quarter, reaching 929 tonnes. This uptick reflects the company’s success in re-establishing supply networks with independent suppliers and entering a new Tyre Supply Agreement, positioning Entyr to meet its forecast processing volumes as it gears up for a full operational restart.

The company maintained tight control over stockpile volumes during the Christmas shutdown, processing and exporting tyres to keep inventory below licensed limits. Notably, Entyr has taken back ownership of tyre shred exports to reduce operating costs, a strategic move that could improve margins as operations scale.

Technology and Product Development Progress

Entyr advanced its product development through second-stage functionality testing of upgrades to its Thermal Desorption Unit (TDU). The trials processed a fixed volume of 20 tonnes of off-the-road (OTR) tyre feedstock, focusing on enhancing the quality of recovered carbon black (rCB) and increasing tyre-derived oil yields. Results from these trials met or exceeded industry standards, with samples now undergoing field testing in rubber manufacturing and soil remediation applications.

These technological improvements not only demonstrate Entyr’s commitment to innovation but also underpin its strategy to deliver higher-value recycled products, which are critical to securing long-term commercial contracts.

Strategic Agreements Signal Commercial Confidence

During the quarter, Entyr entered into several key agreements that underpin its commercial outlook. A Supply Agreement with Austek Production Pty Ltd commits Entyr to supply up to 80 tonnes of rCB per month and up to 2 million litres of tyre pyrolysis oil (TPO) annually at fixed prices through to the end of 2025. Additionally, a Deed of Amendment with Trafigura adjusts previous offtake arrangements, carving out the Austek supply and obliging Trafigura to purchase unsold TPO volumes under specified terms.

What's more, Entyr secured a two-year Tyre Supply Agreement ensuring a steady feedstock supply contingent on its reinstatement to ASX trading, a critical milestone for the company’s future operations and investor confidence.

Financial and Corporate Developments

Entyr’s financial report reveals operating cash outflows of $591,000 for the quarter, with direct operating costs including manufacturing, leased assets, and staff expenses. The company secured an unsecured loan facility of $550,000 from Avior Asset Management to support working capital needs pending recapitalisation. This facility carries a high interest rate of 24% per annum and associated fees, reflecting the company’s current risk profile.

Corporate progress includes the retirement of Receivers and Managers as of November 2024 and receipt of ASX reinstatement conditions in December 2024. The company also settled a longstanding legal claim from 2015, removing a potential overhang on its governance and legal standing.

Outlook and Challenges Ahead

Entyr’s management anticipates that upon completion of its recapitalisation and ASX reinstatement, the company will ramp up revenue generation and improve cash flows through increased tyre collection volumes and operational efficiencies driven by automation and infrastructure upgrades. However, with less than one quarter of funding currently available, the company’s near-term liquidity remains tight, underscoring the importance of successful capital raising and operational execution.

Entyr’s unique thermal desorption technology positions it well within the growing circular economy and waste management sectors, but the path to sustainable profitability hinges on scaling production, securing long-term contracts, and managing financial risks prudently.