Strong rand, low oil price hit Sa­sol prof­its

The Star Early Edition - - COMPANIES - Kabelo Khu­malo

SA­SOL ex­pects its prof­its for the year ended June to fall 11 to 21 per­cent.

The listed chem­i­cals and en­ergy com­pany said yes­ter­day in a trad­ing up­date that this de­cline was de­spite the facts that its Se­cunda Syn­fu­els op­er­a­tions re­port­ing record vol­umes and its Eurasian busi­ness was de­liv­er­ing its high­est pro­duc­tion vol­umes since 2015.

Head­line earn­ings per share (heps) were pro­jected to fall be­tween R4.55 and R8.69 a share, down from the pre­vi­ous year’s R41.4.

The com­pany said its bot­tom line was hurt by a stronger rand and one-off items. The rand strength­ened 11 per­cent against the green­back in the year un­der re­view. Head­line earn­ings are the main profit, which strips out cer­tain one­off items.

The com­pany said its prof­its would also be hurt by the strike at its Se­cunda min­ing busi­ness, which cost the group about R1 bil­lion.

The group said its earn­ings per share for the fi­nan­cial year un­der re­view were ex­pected to in­crease 48 to 58 per­cent.

The mar­kets, how­ever, cheered Sa­sol’s trad­ing up­date de­spite the ex­pected de­cline in prof­its when its stock surged on the day. The shares closed 4.21 per­cent higher on the JSE at R387.58.

The com­pany said in a state­ment that the group had de­liv­ered a strong busi­ness per­for­mance. Most of its value chain, es­pe­cially Se­cunda Syn­fu­els and Eurasian Op­er­a­tions, had out­per­formed in the pe­riod.

“How­ever, con­tin­ued volatil­ity in the macro-eco­nomic en­vi­ron­ment, par­tic­u­larly the stronger rand and low oil price, had ad­versely im­pacted our fi­nan­cial per­for­mance, ex­clud­ing the ef­fect of our hedg­ing pro­gramme,” said the com­pany.

The group’s Se­cunda Syn­fu­els unit in­creased pro­duc­tion vol­umes to a record 7.83 mil­lion tons in the pe­riod un­der re­view, while its Eurasian op­er­a­tions in­creased pro­duc­tion vol­umes 6 per­cent, buoyed by stronger product de­mand in the pe­riod.

How­ever, the com­pany said that plant shut­down dur­ing the first half of the year con­trib­uted to a 3 per­cent de­crease in pro­duc­tion vol­umes and the plant in­ci­dent on May 22, which re­sulted in un­in­tended down­time, led to a 2 per­cent re­duc­tion in pro­duc­tion vol­umes at its Na­tref pro­duc­tion.

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