Renergen Limited reported a near doubling of revenue driven by increased LNG production and prices, yet its loss after tax more than doubled due to commissioning costs and higher depreciation. The company has begun commercial liquid helium sales and is navigating funding challenges and ongoing litigation.
- Revenue up 79.7% to R52.1 million driven by LNG volume and price growth
- Loss after tax widened 124% to R246.9 million due to helium commissioning costs and asset depreciation
- First commercial liquid helium sales commenced post-reporting period
- Loan defaults with waivers granted; net current liabilities exceed assets by R998.8 million
- Ongoing litigation and environmental appeals alongside Nasdaq IPO and fundraising efforts
Strong Revenue Growth Amid Operational Ramp-Up
Renergen Limited’s FY2025 results reveal a company in transition, marked by a 79.7% increase in revenue to R52.1 million. This growth was primarily driven by a 70% rise in liquefied natural gas (LNG) production volumes, which climbed from 2,660 tonnes in 2024 to 4,633 tonnes in 2025, alongside a modest increase in LNG prices from R217 to R225 per gigajoule. The Virginia Gas Project (VGP), operated by Renergen’s subsidiary Tetra4, underpinned this expansion as the company stabilised LNG production following prior operational challenges.
However, the financial uplift was overshadowed by a substantial increase in losses. The Group’s loss after tax more than doubled to R246.9 million, reflecting the costs associated with commissioning the helium production train, which incurred fuel, utilities, and labour expenses without generating revenue during the commissioning phase. Additionally, assets brought into use during the year led to a significant rise in depreciation charges, increasing by R41.8 million year-on-year.
Helium Production Milestone and Operational Challenges
March 2025 marked a critical milestone with Renergen’s first commercial sale of liquid helium (LHe), following the completion of system integration and commissioning of the helium production train. This development positions Renergen as a pioneer in South Africa’s helium market, with plans to ramp up production to nameplate capacity. Despite this progress, the company faced delays in obtaining ISO containers for LHe, system shutdowns during commissioning, and minor LNG efficiency losses, which were addressed during annual maintenance.
Financial Position and Funding Pressures
Renergen’s balance sheet reflects the financial strain of its expansion. Total assets decreased by R359.9 million to R2.35 billion, driven by a sharp reduction in cash and cash equivalents from R471.1 million to R28.3 million, largely due to operational expenditures and capital investments. The Group’s current liabilities exceed current assets by R998.8 million, exacerbated by the classification of several loans as current liabilities following defaults.
The company is navigating defaults on loans from the United States Development Finance Corporation (DFC), Industrial Development Corporation (IDC), and Standard Bank of South Africa (SBSA). While waivers have been granted post-reporting period, these defaults have triggered cross-default provisions, adding complexity to Renergen’s financial management. The company has actively engaged with lenders and secured a R39.3 million private placement and an initial US$10 million inflow from exclusive negotiations with a third party, signaling ongoing efforts to shore up liquidity.
Litigation and Regulatory Environment
Renergen faces several legal challenges, including disputes over mining rights with African Carbon Energy and a solar development encroachment issue with Springbok Solar, both pending court rulings. Additionally, litigation with Molopo Energy Limited over a loan agreement remains unresolved, with a hearing not expected for several years. Environmental authorisation for Phase 2 operations was appealed but mostly upheld, with further assessments underway to address remaining concerns.
Looking Ahead: Nasdaq IPO and Operational Scale-Up
The company’s strategic focus remains on ramping up production to nameplate capacity and securing substantial funding to support Phase 1C expansion and Phase 2 development of the VGP. Renergen plans a Nasdaq IPO targeting US$150 million, contingent on market conditions and regulatory approvals. The successful commissioning and sale of LHe provide a critical operational milestone to bolster investor confidence. Management’s cash flow forecasts and stress testing underpin a going concern assumption, albeit with material uncertainties related to funding and regulatory approvals.
Bottom Line?
Renergen’s operational strides in LNG and helium production set the stage for growth, but funding and legal hurdles loom large as it seeks to turn losses into profits.
Questions in the middle?
- Will Renergen secure the full US$150 million Nasdaq IPO amid current market and regulatory uncertainties?
- How will ongoing litigation and environmental appeals impact the Virginia Gas Project’s expansion timeline?
- Can the company ramp up helium production to nameplate capacity swiftly enough to improve financial performance?