Energy and chemicals producer Sasol reported on Thursday that its earnings for the financial year ended June 30, 2013, would be stronger, owing to an improved production performance and favourable exchange-rate conditions.
Year-on-year headline earnings a share are expected to rise by between 20% and 30%, while earnings a share are expected to increase by between 7% and 17%, the company said in a trading update.
The improved performance was supported by a 4% increase in Sasol Synfuels’ production to 7.4-million tons and a 14% weakening of the average rand/US dollar exchange rate during the year.
These two factors were enough to more than offset a 3% lower average Brent crude oil price and depressed chemical prices.
However, Sasol also announced that its Fischer-Tropsch wax expansion project, which is currently under construction, would be impaired to the tune of R1.5-billion.
It also lowered the fair value of the Arya Sasol Polymer Company, which is up for sale, by R1.6-billion. The write down was in addition to the impairment of R1.9-billion recognised on December 31, reducing the carrying value of the investment over the financial year by R3.6-billion to R2.3-billion.
Sasol's year-end financial results will be announced on September 9.