MOSCOW (MRC) -- Sasol, the world’s biggest producer of liquid fuels from coal, said full-year profit fell as much as 19%, less than analysts estimated, after oil prices declined, said Hydrocarbonprocessing.
The stock rose the most in more than three months. Earnings per share excluding one-time items probably declined by as much as 11.43 rand (90 US cents) in the year to June 30, the Johannesburg-based company said in a statement Friday. That equates to as little as 48.73 rand, which exceeds average estimate of 42.67 rand by 15 analysts polled by Bloomberg.
"Sasol’s profitability was negatively impacted by a 33% lower average Brent crude oil price," it said. Dated Brent traded at an average of USD73.46/bbl from USD109 in 2014, the producer said. Sasol is conserving costs after oil prices declined. The company, whose revenue is linked to the dollar price of oil, delayed plans to build a US gas-to-liquids plant, the nation’s first, that would have cost as much as USD14 billion, it said on Jan. 28.
Sasol shares climbed as much as 4.2% to 439 rand and traded 3.3% higher at 435.19 rand at 9:09 a.m. in Johannesburg, giving the producer a market value of 282.7 billion rand.
The company in March said it would conserve as much as USD4.2 billion in cash in addition to a program that entails cost savings of at least 4.3 billion rand annually from July 2017. The producer exceeded its cost-savings target for the 2015 financial year and said implementation costs remain within forecasts.
Sasol increased liquid fuel sales volumes by 5% to a record 61.5 MMbbl, while base chemicals climbed 2% and performance chemicals increased 3%, it said.
Sasol will take a further 1.3 billion rand partial impairment of a share in the Montney shale-gas assets in Canada due to poor conditions in the North American gas market, it said. It wrote off 5.3 billion rand on the asset last year.
As MRC informed before, in June 2014, Sasol Chemicals North America and INEOS Olefins & Polymers announced that they had reached final investment decision to form a 50/50 joint venture to build an HDPE plant in La Porte, Texas. The ethylene required for the production of the HDPE will be supplied by Sasol and INEOS in proportion to their respective ownership positions.
Sasol Limited is an integrated energy and chemical company based in Johannesburg, South Africa. It develops and commercialises technologies, including synthetic fuels technologies, and produces different liquid fuels, chemicals and electricity.
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