BLBG:Sasol of South Africa’s First-Half Profit Jumps 83% on Oil, Weaker Rand
Sasol Ltd. (SOL), the largest producer of motor fuels made from coal, said fiscal first-half profit advanced 83 percent on higher oil prices and a weaker rand.
Net income climbed to 13.9 billion rand ($1.8 billion) in the six months ended Dec. 31, from 7.6 billion rand a year earlier, the Johannesburg-based company said in a statement today. Earnings excluding one-time items rose 81 percent to 23.50 rand a share. That compares with the median estimate for adjusted earnings per share of 23.49 rand by three analysts surveyed by Bloomberg.
Sasol, operating in countries including Mozambique, Qatar, Iran and the U.S., earned 66 percent of its operating profit from the South African energy business. Crude oil averaged $91.81 a barrel, up 14 percent from the $80.60 recorded a year earlier, according to Bloomberg data.
“The macro-economic trends, the global need for energy diversification and energy security are all supportive of our gas-to-liquids value proposition,” Chief Executive Officer David Constable said in the statement.
The rand weakened 16 percent against the dollar in the second half of 2011, making it the world’s third-worst performer after Hungary’s forint and Poland’s zloty. It traded at an average of 7.6227 to the dollar, 6.7 percent weaker. The company increased its first-half dividend by 84 percent to 5.70 rand a share, from 3.10 rand the previous year.
Output Volumes
A strike and plant incidents reduced production volumes from its Synfuels operation in South Africa by 1.3 percent, Sasol said. Overall group production volumes were lower as output in its other global operations was cut deliberately to match lower demand, it said.
Sasol uses proprietary Fischer-Tropsch technology to make gasoline, diesel and jet fuel from coal it mines in South Africa and from natural gas from below the ocean floor near Qatar. The company is shifting the focus of investment to gas, betting it will be a more profitable raw material than coal.
It is diversifying its crude oil purchases from Iran in view of the recent developments regarding trade restrictions and possible oil sanctions, the company said.
To contact the reporter on this story: Jana Marais in Johannesburg at jmarais@bloomberg.net;
To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net
