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Condensed Consolidated Interim Report for the Six Months Ended 31 August 2016
RENERGEN LIMITED
(formerly Dominica Trade Proprietary Limited)
Incorporated in the Republic of South Africa
(Registration number: 2014/195093/06)
Share code: REN ISIN: ZAE000202610
(“Renergen” or “the Company” or “the Group”)
CONDENSED CONSOLIDATED INTERIM REPORT FOR THE SIX MONTHS ENDED 31 AUGUST 2016
Highlights
First revenue generation due to completion of compression station.
Supplied over 63,000 diesel litres equivalent to Megabus up to 31 August 2016.
Independent Reserve Update indicate 24% increase of the total Proved and Probable Reserves to 100,927
million cubic feet (MMcf) from 2015.
Independent reserve valuation now valued at R6.6 billion.
Investigating meaningful base load power solutions to industrial companies in the Virginia area.
Having delivered on our milestones to date, we have the pleasure to report our reserves are up 24%, losses
per share are down by 95% as a result of our first revenue coming online, and operations are running
smoothly.
This has been a gratifying first six months with not only the plant coming into operation but also reserve
valuations increasing on the back of additional gas discoveries from our drilling campaign. We expect the
full-year will continue to be as eventful as we bulk up operations and prepare for bringing the whole field
into full-scale production.
Email investor queries to investorrelations@renergen.co.za
COMMENTARY
This is the first full six-month period, since the acquisition of Tetra4 Proprietary Limited (“Tetra4”), on which
Renergen is reporting.
Production commenced on 24 May 2016 with compression taking place from the first of our current 12 wells.
The buses commenced operation in two phases over the period of a month and saw the buses operating at
capacity during June 2016, well ahead of our intended schedule. July, August, and September 2016 have
seen all ten buses operating at full capacity.
A total capital expenditure of R11.4 million was incurred during the period relating to the construction of
the compression facility.
The plant faced some early challenges after commissioning, which enabled us to test and implement our
contingency measures to ensure that Megabus Proprietary Limited (“Megabus”) had a consistent gas supply.
The plant is now fully operational and operating according to design specifications.
As announced on SENS on 5 October 2016 significant work was done from a geological perspective which
has resulted in a 24% increase in the total Proved and Probable Reserves to 100,927 MMcf in comparison to
the Independent Reserves Update Report included in the circular distributed to shareholders on
28 October 2015 (“the 2015 Report”). Our independent reserve valuation is now valued at R6.6 billion based
on current economic factors.
Renergen continues to operate as going concern despite the losses incurred in the six months to
31 August 2016. Total assets remain significantly higher than total liabilities. The board of directors of
Renergen (“the Board”) has ensured that the Company has sufficient cash resources to meet its strategic
objectives and financial obligations.
COMPARATIVES
Comparative figures refer to the unconsolidated figures for the six months ended 31 August 2015, as well as
consolidated figures for the year ended 29 February 2016. Tetra4 was acquired in November 2015, which falls
outside the interim reporting period ended 31 August 2015. Hence the comparative interim figures relate to
Renergen’s unconsolidated results.
BOARD CHANGES
Russell Broadhead (independent non-executive director) notified the Board that he has decided to resign as an
independent non-executive director of the Company, effective as of 10 October 2016. The decision to resign
was made following his acceptance of a position as executive director of a company operating in the renewable
energy sector. In order to comply with good governance, the Board is in the process of appointing an
independent non-executive director to ensure that the composition of the Board still meets the requirements
of the code of Corporate Governance.
Condensed Consolidated Statement of financial position as at 31 August 2016
Unaudited as at *Unaudited as at Audited as at
Figures in R'000 31 August 2016 31 August 2015 29 February 2016
Assets
Non - Current Assets
Property, plant, and
equipment 5 20,068 - 7,145
Intangible assets 6 62,600 - 61,504
82,668 - 68,649
Current Assets
Investment in joint venture 6,992 - 6,503
Trade and other receivables 6,607 - 4,134
Cash and cash equivalents 8 14,576 68,616 41,721
28,175 68,616 52,358
Total Assets 110,843 68,616 121,007
Equity and Liabilities
Equity
Share capital 124,158 72,957 124,158
Accumulated loss (34,439) (4,749) (25,330)
Non-controlling interest (8,670) - (7,923)
81,049 68,208 90,905
Liabilities
Non - Current Liabilities
Other financial liabilities 25,398 - 23,857
Provisions - - 2,755
25,398 - 26,612
Current Liabilities
Trade and other payables 4,396 408 3,490
Total Equity and Liabilities 110,843 68,616 121,007
Net asset value per share 104.75 924.79 117.48
Tangible net asset value per
share 23.84 924.79 38.00
*The results for the six months ended 31 August 2015 were before the acquisition of Tetra4 by Renergen,
and are therefore not consolidated. Renergen acquired 90% of the issued share capital of Tetra4 in
November 2015.
Condensed Consolidated Statement of profit or loss and other comprehensive income for the unaudited six
months ended 31 August 2016
Unaudited * Unaudited Audited
six months six months 14 months
ended ended ended
Figures in R'000 Notes 31 August 2016 31 August 2015 29 February 2016
Sales 4 512 - -
Cost of sales (386) - -
Gross Profit 126 - -
Other income 16 - 61
Operating expenses 7 (9,407) (4,749) (18,038)
Share-based payment - - (1,518)
Operating loss (9,265) (4,749) (19,495)
Interest Income** 950 - 3,023
Fair value adjustment (1,541) - (2,946)
Finance costs - - (81)
Total comprehensive loss for the
period (9,856) (4,749) (19,499)
Total comprehensive income
attributable to:
Owners of the parent (9,109) - (18,452)
Non-controlling interest (747) - (1,047)
(9,856) - (19,499)
Loss per share
Basic and diluted loss per share
(cents) 12.74 283.06 36.53
Basic and diluted loss 9,856 4,749 19,499
Weighted average number of shares 77,375,528 1,677,452 53,382,652
Headline loss per share
Basic and diluted headline loss per
share (cents) 12.73 283.06 36.53
Headline loss 9,848 4,749 19,499
Weighted average number of shares 77,375,528 1,677,452 53,382,652
Reconciliation of headline loss
Loss attributable to ordinary equity
holders 9,856 4,749 19,499
Less loss on disposal of assets 7,7 - -
Headline loss 9,848 4,749 19,499
*The results for the six months ended 31 August 2015 were before the acquisition of Tetra4 by Renergen,
and are therefore not consolidated. Renergen acquired 90% of the issued share capital of Tetra4 in
November 2015.
**Prior year interest income for the six months ended 31 August 2015 was R265.
Condensed Consolidated Statement of Changes in Equity for the unaudited six months ended 31 August 2016
Total
Attributable
to Equity Non-
Accumulated holders of the Controlling Total
Figures in R'000 Share Capital Loss Group interest Equity
Balance at 1 March 2015 1 - 1 - 1
Total and other
comprehensive loss 0 (4,749) (4,749) - (4,749)
Share buy back (1) - (1) - (1)
Share issue 73,755 - 73,755 - 73,755
Share issue costs (798) - (798) - (798)
*Unaudited Balance as
at 31 August 2015 72,957 (4,749) 68,208 - 68,208
Share capital at
acquisition (72,957) (72,957) - (72,957)
Loss at acquisition 4,749 4,749 - 4,749
Loss of parent in prior
year (13,756) (13,756) (13,756)
Issue of shares 124,158 - 124,158 - 124,158
Retained earnings at
acquisition date - 5,502 5,502 - 5,502
Loan from minority
shareholder - - - (5,500)# (5,500)
Non-controlling interest
at acquisition - 1,376 1,376 (1,376)# -
Loss for the period - (18,452) (18,452) (1,047)# (19,499)
Audited Balance as at 29
February 2016 124,158 (25,330) 98,828 (7,923) 90,905
Loss for the period (9,109) (9,109) (747) (9,856)
Unaudited Balance as at
31 August 2016 124,158 (34,439) 89,719 (8,670) 81,049
# Non-controlling interests hold 10% of Tetra4’s issued share capital. Non-controlling interests have an
obligation to repay R5.5 million to Renergen. The total non-controlling interests’ share of accumulated loss
includes the share of Tetra4’s accumulated loss at acquisition date.
*The results for the six months ended 31 August 2015 were before the acquisition of Tetra4 by Renergen, and
are therefore not consolidated. Renergen acquired 90% of the issued share capital of Tetra4 in November 2015.
Condensed Consolidated Statement of Cash Flows for the unaudited six months ended 31 August 2016
Unaudited *Unaudited Audited
six months six months 14 months
Figures in R'000 Notes ended ended ended
31 August 2016 31 August 2015 29 February 2016
Cash flows from operating activities
Cash used in operations 11 (10,366) (4,341) (24,123)
Interest income** 950 - 3,024
Finance costs - - (81)
Net cash outflow from operating
activities (9,416) (4,341) (21,180)
Net cash (outflow)/inflow from
investing activities (14,484) - 49,512
Net cash (outflow)/inflow from
financing activities (3,245) 72,957 12,771
Total cash movement for the period (27,145) 68,616 41,103
Cash at the beginning of the period 41,721 - 618
Total cash at the end of the period 8 14,576 68,616 41,721
*The results for the six months ended 31 August 2015 results were before the acquisition of Tetra4 by
Renergen, and are therefore not consolidated. Renergen acquired 90% of the issued share capital of Tetra4
in November 2015.
**Prior year interest income for the six months ended 31 August 2015 was R265.
NOTES TO THE FINANCIAL STATEMENTS
The notes to the historical financial information of the Company at 31 August 2016 are set out below.
1. Basis of preparation
The condensed interim financial statements are prepared in accordance with the Listings Requirements of JSE Limited
(“Listings Requirements”) for interim reports, and the requirements of the Companies Act (Act 71 of 2008 as amended)
applicable to condensed financial statements. The Listings Requirements require interim reports to be prepared in
accordance with International Financial Reporting Standards (“IFRS”), IAS 34 Interim Financial Reporting and the SAICA
Financial Reporting Guides as issued by the Accounting Practices Committee and the Financial Reporting Pronouncements
as issued by the Financial Reporting Standards Council.
The Board takes full responsibility for the preparation of this interim report. The condensed financial statements comprise
the condensed statement of financial position as at 31 August 2016 and the condensed statements of comprehensive
income, changes in equity and cash flows for the six months ended 31 August 2016. These condensed interim financial
statements are neither audited nor reviewed by the Company’s auditors and were prepared under the supervision of the
Chief Financial Officer, Miss F Ravele CA(SA).
2. Accounting policies
All accounting policies applied by the Group in these interim financial statements are in terms of IFRS and are the same
as those applied by the Group in its consolidated financial statements as at and for the year ended 29 February 2016.
3. Comparative figures
Comparative figures refer to the unconsolidated figures for the six months ended 31 August 2015, as well as consolidated
figures for the year ended 29 February 2016. The amounts in the comparative period (31 August 2015) are pre Tetra4
acquisition figures.
4. Sales
Sales were generated from the sale of Compressed Natural Gas.
5. Property, plant, and equipment
Accumulated
Figures in R'000 Cost Depreciation Total
Plant and Equipment 18,009 (568) 17,441
Motor Vehicles 2,082 (609) 1,473
Computer Software 106 (84) 22
Office Equipment 364 (189) 175
Furniture and Fixtures 881 (55) 826
IT Equipment 152 (21) 131
Construction - - -
Balance at 31 August 2016 21,594 (1,526) 20,068
Comparatives
Balance at 31 August 2015
Renergen had no plant and equipment as at 31 August 2015.
Accumulated
Figures in R'000 Cost Depreciation Total
Plant and Equipment 5,308 (329) 4,979
Motor Vehicles 1,252 (455) 797
Computer Software 94 (80) 14
Office Equipment 209 (169) 40
Furniture and Fixtures 27 (18) 9
IT Equipment 77 (9) 68
Construction 1,238 - 1,238
Balance at 29 February 2016 8,205 (1,060) 7,145
6. Intangible assets
Accumulated
Figures in R’000 Cost Depreciation Carrying Value
Exploration and Development Costs 9,076 - 9,076
Molopo Project Mineral Rights* 53,479 - 53,479
Domain Name 45 - 45
Balance at 31 August 2016 62,600 - 62,600
Comparatives
Balance at 31 August 2015
Renergen had no intangible assets at 31 August 2015
Accumulated
Figures in R'000 Cost Depreciation Carrying Value
Exploration and Development Costs 5,270 - 5,270
Molopo Project Mineral Rights* 56,234 53,479
Domain Name - - 45
Balance at 29 February 2016 61,504 - 61,504
*Environmental rehabilitation provision of R2.7million was repaid in the current year due to production wells being over
insured. The Petroleum Agency of South Africa has allowed for the insurance provision to be reduced. The funds allocated
to environmental rehabilitation are provided for in Lombard Insurance and have been included in the cash and cash
equivalent.
7. Operating Expenses
Operating loss for the year is stated after taking the following expenses into account:
Unaudited *Unaudited Audited
six months six months 14 months
ended ended ended
Figures in R’000 31 August 2016 31 August 2015 29 February 2016
Consulting and advisory fees 2,070 3,499 6,064
Employee costs 4,302 - 5,250
Depreciation 465 - 88
Directors fees 760 863
Other operating expenses 1,810 1,250 5,773
9,407 4,749 18,038
*The results for the six months ended 31 August 2015 were before the acquisition of Tetra4 by Renergen, and are
therefore not consolidated. Renergen acquired 90% of the issued share capital of Tetra4 in November 2015.
8. Cash and cash equivalents
Cash and cash equivalents consist of the following:
Unaudited *Unaudited Audited
six months six months 14 months
ended ended ended
Figures in R’000 31 August 2016 31 August 2015 29 February 2016
Bank balances 13,720 68,616 41,172
Environmental rehabilitation guarantee 856 - 549
14,576 68,616 41,721
*The results for the six months ended 31 August 2015 were before the acquisition of Tetra4 by Renergen, and are
therefore not consolidated. Renergen acquired 90% of the issued share capital of Tetra4 in November 2015.
The Company has exploration rights over land in Evander (Mpumalanga) and exploration and production rights
over land in Virginia (Free State). The Company has had to provide for environmental guarantee as part of its
Environmental Management Programme associated with the exploration and production activities for the
rehabilitation and management of negative environmental impacts associated with the exploration and
production activities. The funds are currently invested with Lombard Insurance with interest earned being
capitalised into the account.
9. Related party transactions
There were no related party transactions entered into in the six months ended 31 August 2016.
10. Segment analysis
The chief decision maker currently manages the Group as a single operating entity. Thus no operating segment analysis
is presented.
11. Cash utilized in operations
Unaudited *Unaudited Audited
six months six months 14 months
ended ended ended
Figures in R’000 31 August 2016 31 August 2015 29 February 2016
Loss before taxation (9,825) (4,749) (19,499)
Adjustments for:
Interest income** (950) - (3,023)
Finance costs - - 81
Fair value adjustments 1,541 - 2,946
Depreciation 465 - 88
Share-based payment expense - - 1,518
Impairment of VAT asset - - 32
Changes in working capital
Trade and other receivables (2,473) - (5,702)
Trade and other payables 876 408 (564)
Cash used in operations (10,366) (4,341) (24,123)
*The results for the six months ended 31 August 2015 were before the acquisition of Tetra4 by Renergen, and are
therefore not consolidated. Renergen acquired 90% of the issued share capital of Tetra4 in November 2015.
**Prior year interest income for the six months ended 31 August 2015 was R265.
12. Going Concern
The financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis
presumes that funds will be available to finance future operations and that the realisation of assets and settlement of
liabilities, contingent obligations and commitments will occur in the ordinary course of business. Renergen group started
generating revenue from July 2016, through its subsidiaries sale of compressed natural gas. Management has continued
to monitor the cash flows to ensure that the Group continues to be in a position to pay its debts when they become due.
The capital expenditure is approved by the Board after considering the impact on solvency and liquidity.
13. Events after the reporting period
Venmyn Deloitte determined the fair value of the Group’s gas reserves at R6.6 billion at 30 September 2016. Other than
events mentioned above, the Board is not aware of any other events that occurred after the reporting period.
Date of Release: 18 October 2016
CORPORATE INFORMATION
Country of incorporation and domicile South Africa
Company registration number 2014/195093/06
JSE Share code REN
JSE ISIN ZAE000202610
Company registered office First Floor
1 Bompas Road
Dunkeld West
2196
Nature of the business and principal activities Energy Company focused on alternative and renewable
energy sectors in South Africa and sub-Saharan Africa.
The Company is listed on the JSE Alternative Exchange
(“AltX”)
Executive Directors Stefano Marani (Chief Executive Officer)
Fulu Ravele (Chief Financial Officer)
Nick Mitchell (Chief Operating Officer)
Reginald Edmond Cooke (Executive Director)
Non-Executive Directors Brett Kimber (Independent Non-Executive Chairman)
Mbali Swana (Independent Non-Executive Deputy
Chairman)
Russell Broadhead (Independent Non-Executive Director:
resigned on 10th October 2016)
Luigi Matteccui (Independent Non-Executive Director)
Company Secretary Acorim Proprietary Limited
Transfer Secretaries Computershare Investor Services Proprietary Limited
Registered Auditors Grant Thornton Johannesburg Partnership
Chartered Accountants (SA)
Registered Auditors
Member firm of Grant Thornton International
Designated Adviser Merchantec Capital
Date: 18/10/2016 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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