Sasol, the world's biggest coal-to-gasoline maker, said it will post "strong" earnings growth for the 2014 financial year due to higher oil and chemical prices and favourable currency swings.
Profit in the year to June 30 will probably exceed attributable earnings of R26.3-billion the previous year, the Johannesburg-based company said on Monday. Higher product prices and a weaker rand will increase earnings, it said.
Sasol plans to cut R3-billion of annual spending over the next two to three years to trim labour and other costs in its home market. The company's petrochemical plant in Louisiana, which may cost as much as $7-billion, is progressing according to plan, it said.
"We continue to focus on those factors within our control including cost containment, operational efficiencies and margin improvement," Sasol said.
Free cash flow for the three months to September 30 fell 23% from a year earlier due to higher capital expenditure, the company said. Normalised cash fixed costs are "slightly above" the South African producers' price index, it said.
Production at Sasol's synfuels division will be 7.3-million metric tonnes to 7.5-million tonnes for the 2014 fiscal year, it said. The company produced 7.4-million tonnes of synfuels in the year ended June 30. – Bloomberg