Graphjet Technology Reports $17.8 Million Net Loss and Prepares for Future Production

Graphjet Technology, formerly known as Energem Corp., reported significant financial developments in its recent 10-K filing for the fiscal year ending September 30, 2024. The company recorded a net loss of approximately $17.8 million, a substantial increase of 867.2% compared to a loss of $1.8 million in the previous fiscal year. This increase was primarily attributed to a rise in general and administrative expenses, which surged by 1,322.9% to $17.4 million, largely due to a $13.8 million provision for bonuses approved by the Board of Directors in recognition of the successful business combination and corporate listing.

The company has not yet generated any revenue, as it is still in the pre-commercialization phase of its operations. Graphjet Technology is focused on producing artificial graphene and graphite from palm kernel shells, a renewable waste product. The company has secured a supply agreement with Toyoda, which anticipates annual revenues of $30 million, although it has not yet commenced production due to delays in establishing its manufacturing facility in Malaysia. The facility is expected to be operational by the end of August 2025.

In terms of operational metrics, Graphjet Technology has not yet reported any sales but is actively working on product sampling for market acceptance. The company has also faced challenges related to supply chain disruptions and increased raw material costs, particularly due to recent border control measures in Malaysia and China. These factors have impacted the company's ability to transport and trade graphite efficiently, leading to delays in production schedules and increased operational costs.

Graphjet Technology's strategic focus includes expanding its manufacturing capabilities and enhancing its market presence. The company plans to construct additional production facilities in Malaysia and potentially in North America to cater to the growing demand for graphite and graphene, particularly in the electric vehicle sector. The global graphite market is projected to grow significantly, driven by demand from the lithium-ion battery industry, which positions Graphjet Technology to capitalize on this trend once it begins commercial production.

Looking ahead, Graphjet Technology acknowledges the uncertainties surrounding its ability to achieve profitability and maintain compliance with Nasdaq listing requirements. The company is actively seeking additional financing to support its operations and expansion plans, as it has incurred cumulative losses and negative cash flows since inception. The management remains optimistic about the future, emphasizing its commitment to sustainable production methods and the potential for growth in the graphene and graphite markets.