JSE-listed alternative and renewable energy business Renergen’s revenue increased by 179% to R1.4-million in the half-year ended August 31, bolstered by a higher diesel price following a weaker rand and higher oil prices in the period under review.
The company’s cost of sales increased by 381% to R1.9-million, while operating expenditure increased by 77% to R16.7-million.
“Our interim results have been modest and losses increased slightly, primarily as a result of higher engineering costs and external consultant fees for the finalisation of environmental submissions. We do not expect to be net cash flow generative until the plant goes into full scale production in 2019,” said CEO Stefano Marani in a statement.
The company’s property, plant and equipment and intangible assets increased in line with the continued expansion of the group’s operations.
Meanwhile, Renergen said that its approval by the Petroleum Agency of South Africa (Pasa) to commence with construction of natural gas liquefiers in 2018 was a milestone for the company, enabling its onshore petroleum project Tetra4 to go into full-scale production.
Tetra4 will commence with production of liquefied natural gas early in 2019.
“We have always maintained that Tetra4 is a unique opportunity, and this has once again played a critical role in our engineering. Given the very high concentration of helium in our gas, it meant we were able to optimise plant design and use the cryogenics from the helium liquefaction to produce LNG instead of compressing the gas,” Marani said.
He added that Renergen was also pleased about the positive record of decision of Tetra4’s environmental impact assessment granted by Pasa in September.
He said that trials on two European brand trucks, running on dual fuel, have shown significant savings in both overall fuel consumption as well as cost-per-kilometre metrics.
Renergen is also in advanced discussions with several large fleet operators and Tetra4 is now capable of creating a nationwide filling network for customers, given the higher energy density of LNG achieving significantly longer ranges compared with compressed natural gas.
“We are excited about the progress made on all fronts. This will realise value far sooner than previously anticipated and, once the plant is in full production, we should be able to explore and develop further opportunities at Tetra4,” Marani said.