Montauk pays dividend as profit surges
US-based alternative energy producer reported a 65% rise in revenue from its renewable natural gas facilities
Montauk, the US-based alternative energy producer spun out from Hosken Consolidated Investments in late 2014, will pay a maiden dividend for the year to the end of March.
On Friday, Montauk – which produces renewable gas and electricity from landfill sites — declared a 39.5c per share dividend after pre-tax profits rocketed 579% to $15.7m. The company reported a 65% rise in revenue from its renewable natural gas facilities on the back of a 10% increase in renewable gas volumes to 3.9-million BTU (British thermal units).
The per share dividend the company declared after pre-tax profits increased 579% to $15.7m. Revenue rose 65% from renewable natural gas facilities.
Montauk also sold 24-million RINs (renewable identification numbers) — about 10-million down on the previous financial year. But the average pricing realised on RIN sales was 90.1% higher. The environmental benefits from renewable natural gas production at landfills qualify as a RIN under the US Renewable Fuel Standard (RFS) programme.
Montauk CEO Martin Ryan reiterated that with electricity and natural gas commodity pricing in the US depressed for several years, the premiums associated with the environmental attributes of renewable energy would continue to be a major factor in the profitability of the business.
Ryan said Montauk would continue to capitalise on and leverage the opportunities that developed in the renewable energy markets. "The evolving regulatory environment mandating the use of renewable fuels can lead to opportunities that allow existing projects to capture additional premiums as they become available."
Ryan said Montauk had decided to remain flexible in its off-take contract strategy to capture and maximise value from these programmes.
He cautioned, however, that uncertainty on how the RFS programme would be administered and supported by the Trump administration had impacted the stabilisation of the RIN market, causing price volatility and limiting the ability to sell RINs on a forward basis.
Revenue from Montauk’s electric generation facilities increased 138% with production shifting up 33% to 0.3-million MWh (megawatt hours).
Ryan attributed the volume increase to commercial operations commencing at Bowerman Power, a 20MW electric generation facility in California.
He said electricity prices were 7.3% higher with 60.9% (previously 19%) of renewable electric production sold under fixed-price contracts. Ryan said the increase fixed-price contracts stemmed mainly from Bowerman’s fixed-price agreement with the City of Anaheim.