Sasol profit falls on strong rand

Sasol’s Secunda synfuels operations posted record full-year output, even as a stronger rand and a recession-hit SA economy curbed profit.

Headline earnings declined by between 11% and 21% during the 12 months through June 30, the company said in a statement yesterday. That equates to profit per share range of R32.71 to R36.85, compared with the R34.45 median estimate of 12 analysts surveyed by Bloomberg. Sasol’s stock rose the most in four months.

Sasol benefits when the rand is weaker because most of its products are sold in dollars, while its costs are mainly in rands. The rand strengthened by 11% against the dollar over the 12-month period. Co-CEO Bongani Nqwababa said in February the company had hedged 30 million barrels of oil at $47 a barrel for the rest of the year, but didn’t have currency-related protections in place.

“Continued volatility in the macroeconomic environment, particularly the stronger rand and low oil price, has adversely impacted our financial performance,” Sasol said.

Sasol’s Secunda synfuels operations increased production 1% to a record 7.83 million tons. Total liquid fuels sales volumes fell 2%. – Bloomberg