Renergen set to release the worst results in its history

Renergen released a trading statement for the year that ended 28 February 2025, which revealed a significant increase in its loss per share.

Renergen reported a significant financial performance deterioration, expecting its profit per share to drop between R1.52 and R1.67.

The result is a significant deterioration from the loss per share of R0.75 in 2024, extending Renergen’s declining performance trend.

Renergen’s February 2024 loss per share of R0.75 translated to a total loss of R110 million for the year.

In the trading statement, Renergen stated that it expected its loss for the February 2025 financial period to increase between 102% and 122%.

This would put the company’s loss for February 2025 between R222 million and R244 million, marking its worst results in history.

Since it was listed on the Johannesburg Stock Exchange (JSE) in June 2015, the company has failed to generate a profit.

Its main asset is the Virginia gas project, which the company said could produce large quantities of liquid natural gas (LNG) and liquid helium (LHe).

Renergen told investors it would generate 52 tonnes of LNG and 400 kg of helium per day from phase 1 of the project. However, this has not materialised to date.

Simply put, the company has failed to show that it can profitably produce and sell liquid natural gas and liquid helium.

Cilandia Capital’s activist investment manager, Albie Cilliers, alleged that Renergen does not have the gas reserves it claims to have.

Renergen denied this allegation, pointing to a 2021 report released by Sproule, an engineering consultant firm based in Calgary, Canada.

Sproule’s report confirmed that the Virginia Gas Field holds significant potential for methane and helium production.

Cilliers told Daily Investor that Renergen has failed to prove that its reserves live up to the Sprouce report’s findings.

Renergen has also faced environmental and legal headwinds. In August 2024, news broke that Renergen’s Tetra4 project could not expand or undertake any associated activities.

This followed an objection by the Centre for Environmental Rights (CER) to the project’s integrated water and waste management plan.

Renergen upbeat about its prospects

Despite Renergen’s poor financial track record and missed targets, the company’s management team remains upbeat about its prospects.

Renergen CEO Stefano Marani told Oil and Gas Middle East that Renergen will transform South Africa into a net exporter of helium.

He added that the company further creates significant opportunities for investment from the Middle East.

Marani and Renergen COO Nick Mitchell told the publication that the project offers helium concentrations up to 1,000 times richer than some of the world’s major sources.

“No other helium-producing nation can reach global customers as efficiently as we can,” Mitchell claimed in the interview.

Marani added that Renergen aligns with the Middle East’s objectives around economic diversification, energy sustainability, and securing access to critical minerals.

“The region’s experience in large-scale natural gas projects makes them ideal partners,” Marani notes.

It is clear that Renergen’s management team is looking for investment from the Middle East to fund its operations, and promote the company as the next big thing.

However, many analysts are not as upbeat about the company’s prospects and have warned investors about the significant risks associated with it.

David Shapiro from Sasfin Securities said he could not see Renergen making it and would not advise people to buy the stock.

“It will take a huge amount of money and effort to get this thing productive to a point where you are making big profits,” he said.

“The more I look at Renergen, the more nervous I get about the operation. Sooner or later, they need to get big money.”

Devin Shutte, head of investment at The Robert Group, said Renergen had no margin for error.

“There is very little room to breathe at this stage. You just don’t see the talk translate into action,” he said.