Highlights

  • De.mem Limited (ASX:DEM) reported H1 2026 revenue of A$17.6 million, up 26% on the prior corresponding period.
  • Cash receipts reached A$20.0 million, up 28%, extending growth over the prior corresponding quarter to 29 consecutive quarters.
  • Adjusted EBITDA rose to A$1,582 thousand from A$556 thousand, and operating cash flow was A$928 thousand.
  • Cash and term deposits were A$4.3 million at 30 June 2026, with WaterMark certification expected before the end of 2026.

De.mem Limited provides water and wastewater treatment systems and services, and supplies membranes, specialty chemicals and consumables. The company's half-year report for the six months to 30 June 2026, released in late August 2026, recorded higher revenue, cash receipts and operating cash flow than the prior corresponding period.

Company Business

De.mem (ASX:DEM) earns most of its income from recurring sources, which the company puts at more than 90% of revenue. These include long-term build-own-operate and operations and maintenance contracts, specialty chemicals, small equipment and consumables, membrane replacements and domestic system sales with cartridge replacements.

Its operations span Australia and Germany, with distribution partners in Singapore and elsewhere in Asia. The Western Australian business, which includes Core Chemicals, De.mem-Capic and Auswater Systems, accounted for about 49% of group revenue in the first half and supplies process chemicals to gold miners. The German subsidiary, De.mem-Geutec GmbH, recorded revenue of about A$2.5 million in the period, a record. A further product line is a graphene oxide enhanced hollow fibre membrane, which holds US NSF product certification and is being commercialised for domestic water filtration through third-party distributors.

Recent Development

In late July 2026, De.mem (ASX:DEM) reported June quarter cash receipts and positive operating cash flow. Receipts of about A$9.6 million were up about 24% on the prior corresponding period, and the first-half total of about A$20.0 million was the strongest first half in the company's history. Germany contributed record quarterly receipts of about A$1.5 million, including a wastewater project for a galvanizing client worth about A$500 thousand.

In May 2026, the company received an initial filter cartridge order from a Singapore distributor worth about A$100 thousand a year in revenue, with repeat orders expected at regular intervals. De.mem held its annual general meeting on 26 May 2026.

Financial Performance and Sector Context

For the six months ended 30 June 2026, De.mem (ASX:DEM) reported revenue of A$17.6 million compared with A$14.0 million in the prior corresponding period. Cash receipts were A$20.0 million, up 28% from A$15.7 million. Adjusted EBITDA, which excludes one-off items such as acquisition costs and share-based payments, was A$1,582 thousand compared with A$556 thousand. Gross margin for the half was 41%.

Operating cash flow was A$928 thousand, made up of A$504 thousand in the March quarter and A$424 thousand in the June quarter. The German subsidiary contributed about A$350 thousand of the June quarter figure. Cash and term deposits were A$4.3 million at 30 June 2026, compared with A$4.0 million at the start of the year. The company has a shareholder loan facility of A$500 thousand, of which A$459 thousand was drawn, and reported no unused facilities.

Demand from gold miners for process chemicals is a driver for its Western Australian business, while domestic water filtration products depend on certification and distributor channels. Management said it expects record results for the 2026 calendar year and continued performance in the second half.

Risks to Consider

De.mem (ASX:DEM) reported cash of A$4.3 million and no unused financing facilities at 30 June 2026. Operating cash flow of A$928 thousand for the half compares with receipts of A$20.0 million, so cost control and working capital remain relevant. Revenue concentration in Western Australia, at roughly half of group revenue, links results to activity among gold miners. Domestic water filtration sales depend on regulatory approvals, including WaterMark certification in Australia, and on distributor demand. Project-based work, such as wastewater contracts in Germany, can vary between quarters, and acquisitions carry integration risk.

What to Watch Next

The company expects WaterMark certification for its domestic water treatment products to conclude before 31 December 2026. Completion would allow it to launch membrane products for drinking water in Australia. De.mem (ASX:DEM) will also report on the September quarter, which will show whether the run of quarterly cash receipts growth continues beyond 29 consecutive quarters.

Other measurable items include repeat orders from Singapore, further customer wins at Core Chemicals, the contribution of the German business, operating cash flow and the cash balance, which was A$4.3 million at 30 June 2026.

Key Insights

De.mem (ASX:DEM) reported its highest half-year revenue and cash receipts, together with higher adjusted EBITDA and positive operating cash flow. Its income is largely recurring, and growth has been supported by the Western Australian and German businesses. Certification timing, cash generation, customer concentration and liquidity are the main points for assessing later disclosures.