Renergen Reports Record Loss Despite Revenue Growth and Operational Milestones

Gas producer Renergen has reported the worst financial loss in its history, despite a notable increase in revenue and production volumes in its liquefied natural gas (LNG) business.

The company’s financial results for the year ending 28 February 2025, released on Wednesday, revealed that losses ballooned by over 100%, largely due to high operational costs associated with the ramp-up of its helium operations.

Revenue Growth Overshadowed by Soaring Costs

While revenue rose by nearly 80% to R52.1 million—thanks to increased LNG output and higher average prices—this growth was dwarfed by escalating costs. Renergen sold 4,633 tonnes of LNG in 2025, up from 2,660 tonnes the previous year. Average LNG prices climbed slightly to R225/gigajoule from R217/gigajoule.

Despite these gains, the company’s total comprehensive loss surged to R235.8 million, up from R110.2 million in 2024—a 114% increase.

The key drivers of this steep loss included:

• Increased fuel, utility, labour, and lubricant costs during the helium production train’s commissioning phase.

• Operational costs now hitting the income statement instead of being capitalised, as construction of the plant concluded.

• A significant increase in depreciation—up by R41.8 million year-on-year—due to more assets being brought into use.

These cost pressures resulted in a gross loss for the year, despite the increased LNG production.

Net Asset Value Declines

In addition to the mounting loss, Renergen’s tangible net asset value per share dropped 16%, from R8.40 in 2024 to R7.03 in 2025, due to lower cash reserves and ongoing operational losses.

Operational Progress Amid Financial Setback

Despite the dismal bottom line, Renergen highlighted several operational milestones that position it for longer-term growth. Among them:

• Completion of the LHe production train at the Virginia Gas Project (VGP).

• First successful sale of liquid helium (LHe) post reporting period.

• Full takeover of plant operations from the Original Equipment Manufacturer in July 2024.

• Completion and conversion of two exploration wells with high helium concentrations into production-ready wells.

The company also reported that it produced 4,885 tonnes of LNG during the year, up from 2,876 tonnes the year before.

However, the company was not without challenges. It noted delays in ISO container procurement, system shutdowns, and minor efficiency losses in LNG operations. Still, Renergen remains optimistic, stating that it is actively working to optimise operations for long-term efficiency and growth.

Market Reaction

At the time of publication, Renergen’s share price had declined by 1.39%, reflecting investor concern over the deepened loss.

While Renergen’s 2025 financial performance paints a tough picture, the company’s continued progress on strategic operational goals and expanding production capacity may offer a brighter outlook in the medium to long term—provided it can control costs and begin capitalising on its helium production.

{Source: Daily Investor}

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