Operating profit for the cluster, which oversees operations in Sasol Mining, Sasol Gas, Sasol Synfuels, and Sasol Oil, has increased by 29 % to R28-billion.

The South African energy cluster is the largest contributor to the Sasol group and provided 80,6 % of the group's overall R129,9-billion turnover and 82,8 % of its R33,8-billion operating profit.

As a whole, the energy cluster mines and supplies feedstock and utility coal, produces and supplies liquid fuels and chemicals feedstock derived from coal, natural gas and crude oil, and markets and supplies pipeline gas.

Sasol Mining's operating profit of R1,39-billion was 19 % higher than the previous year. The coal supplier attributes the increase primarily to improved coal quality, higher export prices on coal and greater sales volumes at higher prices to Sasol Synfuels.

The increase was despite lower sales volumes to external domestic and international markets. The costs of production and export distribution have also cut into its profit for the year.

Sasol Gas reported an 8 % decrease in operating profit to R1,78-billion when compared with the previous year.

However, Sasol adds that if the sale of 25 % of the republic of Mozambique's Pipeline Investments Company in the previous year is taken into account, as well as the impairment of a portion of a pipeline in the current year, the operating profit actually increased by 14 % .

It says this increase was helped by improved sales volumes to new and existing customers, higher crude oil prices and foreign exchange gains.

Sasol Synfuels benefited from higher oil prices, a weaker rand/ dollar
average exchange rate for the year and increased production volumes to grow its operating profit by 19 % to R19,4-billion, despite a R2,2-billion net oil hedge loss for the year.

Its production volumes grew, despite production instabilities, on the back of increased efficiency, owing to an increase in natural gas intake. Synfuels expects to increase production in 2009.

Sasol Oil had a very strong year, recording a 128% increase in operating profit to R5,5-billion. It benefited from higher production volumes at the Natref refinery and increased sales volumes, which in turn was helped by a growth in commercial business and the addition of 15 retail convenience centres, which now number 406 under the Sasol and Exel brands.

To subscribe to Engineering News's print magazine email subscriptions@creamermedia.co.za or buy now.