Petrochemicals group Sasol posted a 25 percent rise in full-year earnings yesterday, boosted by higher crude oil prices and a weaker rand, and said it expected better operational performance in the current year.
Sasol, the top maker of motor fuel from coal, said headline earnings a share for the year to June rose 25 percent to R42.28 from the previous year, in line with Sasol’s own guidance of a jump of between 20 to 30 percent given last month. Headline earnings excludes certain one-time items.
Its earnings were helped by a 17 percent rise in the average crude oil price, higher prices for its products as well as an 11 percent weaker rand to dollar exchange rate.
A weaker rand is positive for South African exporters as it lifts profits when overseas earnings are brought home.
At 5pm the rand traded at R8.1506 against the dollar.
Full-year turnover rose to R169.4 billion from R142.4bn a year ago. Output of synthetic fuels was 7.2 million tons and the company said it expected production to improve to between 7.2 million and 7.4 million tons in the current year.
Sasol said it expected crude oil and product prices to remain volatile in the near term, while the rand would remain one of the biggest external factors affecting its profitability.
“We remain on track to deliver on our expectations for improved operational performance,” it added.
The company declared a final gross cash dividend of R11.80 an ordinary share, up from R9.90 last year.
The stock is down nearly 3 percent this year, compared with a 10.8 percent rise in the Top40 index.
Shares closed 2.56 percent higher at R383.66 yesterday.