Phoslock Reports $1.425M Revenue with $1.057M EBIT Loss in H1 2025

Revenue Growth Driven by International Markets

Phoslock Environmental Technologies Limited has reported a striking 148% increase in revenue for the half-year ended 30 June 2025, reaching $1.425 million compared to $575,000 in the prior corresponding period. This growth was primarily fuelled by strong sales to its Brazilian distributor, which accounted for more than half of total volume, alongside meaningful contributions from Europe and the United States. Smaller but notable sales were recorded in South Korea, Australia, and China.

Improved Margins but Persistent Losses

Despite the revenue surge, Phoslock remains unprofitable, reporting an underlying EBIT loss of $1.057 million. While this represents an improvement from the previous period’s $1.273 million loss, the net loss after tax widened to $1.057 million from $588,000. The company’s gross profit rose substantially to $580,000, reflecting a gross margin of 38%, a significant recovery from near breakeven in the prior period.

Cash Position and Operational Outlook

Phoslock ended the half-year with a healthy cash balance of $6.18 million and no external debt facilities, supporting a positive net current asset position of $9 million. Operating cash outflows narrowed to $1.09 million from $1.98 million, indicating improved cash management. The company is focused on expanding its global sales footprint, maintaining operational capabilities, and expects a substantial increase in sales for 2026. Inventory levels remain sufficient for near-term demand, with plans to resume production later in 2025 or early 2026 if sales targets are met.

Regulatory and Legal Challenges Persist

Phoslock’s recent half-year report highlights ongoing legal and regulatory risks. The company remains under investigation by the Australian Federal Police for alleged bribery and foreign corruption offenses, and is subject to inquiries by the Australian Securities and Investments Commission. Additionally, group proceedings initiated by the Banton Group and cross-claims involving former directors and KPMG are in the discovery phase, with mediation scheduled for September 2025. While no provisions for potential liabilities have been recognized, these matters pose material uncertainty.

ASX Suspension Lifted

After a prolonged suspension, Phoslock’s trading on the ASX was reinstated on 15 August 2025, a positive development that may improve investor confidence. The company received a $360,000 insurance reimbursement for legal costs, easing some financial pressure. The Board remains committed to achieving profitability and positive cash flow, emphasizing ongoing market expansion and operational stability.