Our opinion on the current state of RENERGEN(REN)Renergen (REN), an alternative energy company, focuses on renewable projects in Africa and has invested in liquefied natural gas (LNG) and helium. Since listing on the JSE in 2015, the company has faced financial challenges, with its share price reflecting continued losses. Despite this, Renergen has managed significant milestones, including a R125 million rights issue to secure additional financing and an IPO on the ASX, which was oversubscribed. The company holds claims of proven helium reserves exceeding 6 billion cubic feet and has received substantial funding, including $750 million from Standard Bank and the International Development Finance Corporation to support its Virginia Gas project.
For the six months ending 31st August 2024, Renergen reported a slight increase in revenue to R25.6 million, up from R23.8 million, but a widening headline loss per share to 45.73 cents from 29.87 cents in the prior period. The loss was attributed to increased operating costs, including higher employee expenses, depreciation, professional fees, insurance, maintenance, and interest expenses, alongside a lower deferred tax credit. These were somewhat offset by other operating income, mainly from foreign exchange gains.
Although Renergen began producing liquid helium for sale as of August 2024, which initially boosted the share price, the rally was short-lived. Given its volatile nature and continued losses, Renergen presents a high-risk, speculative opportunity. We advise investors to exercise caution and consider waiting for a more sustained upward trend before further investigation.
