The Phoslock Environmental Technologies Ltd (ASX: PET) share price jumped up by more than 30% yesterday. This was on the back of a positive market update and possibly the fact the company has suffered minimal impact of the effects of COVID-19.
PET provides global water technologies and solutions to remediate polluted waterways. It also provides design, engineering and contracting services. The company's lead product, also called Phoslock, was developed by the CSIRO in the early 2000s. Phoslock permanently binds to phosphate in waterways, transforming it to a new mineral. This new mineral then becomes part of the natural sediment in the waterway, reducing the growth of harmful algae that can result from excess phosphate .
The product is certified for use in drinking water in North America, Europe, Brazil, Australia, and China .
Image source: Getty Images
What moved the Phoslock share price?
PET announced new projects in Washington State and New Jersey. It also announced a project extension in Brazil as well as continuing projects in Italy and The Netherlands.
USA
In Washington State, PET has secured a deal for a new application of Phoslock at the 240-hectare Kitsap Lake. In addition, Princeton Hydro in New Jersey awarded the company with a contract to treat harmful algal blooms (HABs) in Lake Hopatcong.
Dr. Fred Lubnow, Director of Aquatic Resources at Princeton Hydro, stated:
"If this technology is deemed successful and cost-effective in Lake Hopatcong, we could set the precedent for large-scale HABs prevention in other lakes throughout New Jersey, and even across the nation".
South America
In Brazil, PET's contract to treat Lake Pampulha in the State of Minas Gerais has been renewed for its third year. At the same time, the initial application to a major drinking water reservoir in Rio De Janeiro has also been successful.
Furthermore, additional treatments on drinking water reservoirs in both northern and southern Brazil will occur in the second half of 2020.
Europe
Later this year, Phoslock will be applied to small lakes in Italy and The Netherlands. Furthermore, the company is continuing conversations for several other potentially large projects across Europe.
PET Managing Director, Lachlan McKinnon stated:
"The additional resources we are investing in growth outside of China is now being reflected in a stronger pipeline of new contracts and, over time, will help ensure we have a more balanced spread of revenue generating opportunities".
Phoslock share price
The Phoslock share price rocketed up by 30.36% on Monday to end the day at 36 cents. In today's trade, it has edged slightly lower and is currently sitting at 34 cents (at the time of writing). This values the company at just under $210 million with a price to earnings ratio of 63.21. In conclusion, this company has been growing consistently and, with its increasing focus on global expansion, I believe it looks set to continue this trend into the future.
