STEVEN SWINDELLS, Johannesburg | Wednesday 10.30am.
SYNTHETIC fuel producer Sasol posted a better-than-expected 10,5% rise in half-year earnings as costs fell and output rose, and predicted further growth in 1999.
However, lower crude oil prices, and consequently chemical feedstock prices impacted negatively on profits.
Profit after tax in the six months ended December 25 rose to R1,255-billion, defying market expectations of a fall because of a slump in world crude oil, chemical and synthetic fuel prices.
Sasol’s shares gained as much as 5% on the news before edging back to trade at R24,70, up 85 cents. ”The results are very pleasing to us. We are looking for growth in 1999,” Sasol chief executive Pieter Cox said.
Headline earnings per share rose to 199,6 cents from 178,4 cents in the same period a year earlier. A consensus of analysts’ forecasts predicted earnings per share at 160 cents. The dividend is unchanged at 65 cents.
Sasol said it anticipates growth in 1999 earnings provided there are no large changes in international crude oil and chemical prices or the rand-dollar rate.
Cox said earnings were boosted by cost-cutting and by boosting yields, particularly in its synfuel division, which increased output by 3%. Higher production and cost savings from its mining division and lower tax rates also helped.
A weaker rand also boosted Sasol’s profit, as it earned more in hard currency from exports while paying its local costs in rand. — Reuters