Falling gas prices deflate Montauk Energy profits
Expenses for the company’s renewable gas facilities also rose, primarily due to two new facilities beginning operations
Montauk Energy, which collects gas and produces electricity at US landfill sites, said on Friday a collapse in the price of the organic gases it produces resulted in an 88.6% fall in interim headline earnings to end-September.
Rising gas production due to optimisation at two of its plants was offset by a 14.6% fall in the average prices of the commodities it produces. Profit for the period fell 88.5% to $1.27m.
Expenses for the company’s renewable gas facilities (RNG) also rose 44.1% in the period, primarily attributable to two new facilities beginning operations in the period.
The company has warned previously that its operating environment is challenging, and that despite the environmental benefits of collecting gas, the nature of the gas collected is variable.
“With electricity and natural gas commodity pricing in the US having been depressed for several years, while still maintaining a relatively high degree of short-term volatility (due to weather, supply and demand, and other market forces), the premiums associated with the various environmental attributes are the driving factor in the profitability of the business,” the company had said.
Johnny Copelyn, CEO of Hosken Consolidated Investments (HCI), is the non-executive chair and major shareholder in Montauk.