JSE-listed Sasol expects to report an increase of between 3% and 9% in headline earnings per share (HEPS) and an increase of between 51% and 57% in earnings per share (EPS) for the six months ended December 31.

Excluding the impact of notable one-off items, net impairments charges, stock movements and the share-based payment expense, EPS would have decreased by between 21% and 27%, the group noted.

It outlined that its profitability for the six-month period under review had been positively impacted by a solid operational performance; normalised cash fixed costs; a 9% weaker average rand/US dollar exchange rate; notable one-off charges prompted by volatile macroeconomic factors; changes to the share price and decisive management actions; the reversal of share-based payment expenses of R2.5-billion; the positive impact arising from the movement in unrealised  profit in inventory of about R2-billion; and lower net impairments of R200-million.

Conversely, Sasol’s profitability was negatively impacted by 19% lower average Brent crude oil prices.

The group said it had maintained a strong group-wide operational performance, with its Southern African energy business increasing white and black product volumes by 3%.

“Our base chemicals and performance chemicals businesses increased their sales volumes by 1% and 7% respectively, on a comparable basis. In addition, our Oryx gas-to-liquids facility sustained its solid performance, with an average utilisation rate of 91% for the period under review,” it noted.

PROJECT 2050
In July last year, Sasol operationalised its Project 2050 initiative to extend the lifespan of its South African operations to the middle of the century, further demonstrating its commitment to South Africa and the region. The Sasolburg and Natref operations were extended to 2034.

This resulted in a decrease in depreciation of R700-million and a decrease in environmental provisions of R1.8-billion for the six months.

The most significant remeasurement items for this period included the reversal of the impairment of its Fischer-Tropsch wax expansion project, at its Sasolburg Sasol One site, of R1.3-billion, which was mainly owing to the extension of the useful life of the asset from 2029 to 2034 and a weaker rand/US dollar exchange rate.

The group expects to publish its interim results on March 9.