Higher energy prices and fewer Covid-19 lockdowns helped helium and natural gas group Renergen increase its revenue more than a third and improve its loss per share by more than one-fifth, as it expects its Virginia gas plant to become operational “imminently”.
Despite the financial performance, the group believes it is well under way in its transition from a “project company to an operational focused company”.
“We anticipate the start-up of the plant soon and are now taking every opportunity to double check and review before finally turning the plant on,” the group said on Tuesday in its preliminary final report for the year end-February.
Revenue increased by 36.8% from R1.9m to R2.6m, but basic loss per share improved by 23.6% from 36.29c to 27.73c. No dividend was declared for the 2022 financial year.
The group first acquired its petroleum production rights on a farm in the Free State in 2013 for $1 (R15.99 at today’s rate) and is now valued at about R5.421bn on the JSE.
Renergen’s subsidiary Tetra4 wholly owns a gas plant in Virginia in the Free State, SA’s only onshore petroleum development right, which contains among the world’s highest helium concentrations. Helium is a byproduct of natural gas and is used in the production of computer chips, cellphones and more.
Most of the group’s losses were because of Tetra4 as its revenues have been minimal so far while an extra R260.7m was spent on finishing construction of the gas plant.
Demand for helium from the healthcare, technology and aerospace sectors is expected to drive the growth of the global helium market, which is currently in short supply. Renergen said demand would drive how the group develops the next phase of the gas project.
Some of the operational challenges Renergen faced in the last year included Covid-19 lockdown, which led to shipping and supply chain delays, some employees taking part in the National Union of Metalworkers of SA’s (Numsa’s) strike in October, and construction delays as the La Niña extreme weather pattern brought higher-than-average rainfall in December 2021.
Renergen expects to release its final audited results on May 19.
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