David Constable
Photo by: Duane Daws
JOHANNESBURG (miningweekly.com) – The first-half earnings attributable to the shareholders of South Africa’s fuel-from-coal producer Sasol plunged 63% to R7.3-billion in the six months to December 31, from R19.5-billion in the prior period.
Headline earnings a share of the company headed by outgoing CEO David Constable fell 24% to R24.28 and earnings a share to R11.97, compared with the prior period.
The board declared an 18.6%-lower interim dividend of R5.70 a share.
Profit from operations halved to R14.9-billion on “challenging and highly volatile” global market conditions which saw average Brent crude oil prices move down by 47% to average $47/bl, compared to $89/bl in the prior period.
The price of Sasol’s basket of commodity chemicals declined 23%, with the impact of lower oil and commodity chemical prices partly offset by a 24% weaker rand/dollar exchange rate of R13.62 to the dollar for the six months to December 31, compared with R10.99 in the prior period.
The average margin for Sasol’s speciality chemicals remained resilient.
Countering the macroeconomic environment, Sasol upped production volumes and contained cost increases below inflation.
Its Secunda Synfuels Operations (SSOs) production volumes rose by 3% to one-million barrels. Total liquid fuels production for Sasol’s energy business increased by 4% to 1.1-million barrels on a higher portion of SSO’s volumes being used by the energy business.
The Oryx gas-to-liquids facility in Qatar delivered another solid performance with an average 90% utilisation rate.
Secunda Chemicals and Sasolburg Operations’ production volumes remained in line with the prior period.
The increase in volumes from the company’s Fischer-Tropsch wax expansion project was offset by lower polypropylene (C3) volumes owing to planned commissioning activities associated with the C3 expansion project.
The sales volumes of the base chemicals business decreased by 13% on lower C3 volumes available as a result of the commissioning of the C3 expansion project and softer demand for certain commodity chemical products.
Sales volumes from the performance chemicals business were consistent after conditions were normalised for the planned shutdown at the company’s ethylene plant in North America.