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Cape Town - Sasol [JSE:SOL] announced in a trading statement on Thursday that it expects earnings per share (EPS) for the six months to end-December 2016 to increase by 12% to 22% (R1.44 to R2.63 per share), compared to the 2016 financial half-year (prior period) EPS of R11.97.
Headline earnings per share (Heps) for the same period are expected to drop by 34% to 44% (R8.26 to R10.68/share) from the prior period Heps of R24.28. Overall, Sasol delivered a strong business performance across most of the value chain.
Secunda Synfuels' production volumes rose by 1% and the company's Eurasian operations increased production volumes by 8% on the back of stronger product demand. Natref's production volumes were down 7%, mainly due to planned shutdowns during the period under review.
Normalised sales volumes increased by 11% for the base chemicals business and 2% for the performance chemicals business compared to the prior period, mainly on the back of stronger demand, higher chemical margins and improved plant stability.
Liquid fuels sales volumes slipped by 2% due to the Natref planned shutdowns and more volumes allocated to the higher margin yielding chemical businesses.
Sasol said: "We have seen a steady and continued recovery in global oil and product prices during the period under review. Normalised cash fixed costs continued to trend well within inflation for the period under review." However, it pointed out that Heps was negatively impacted by the stronger closing exchange rate for the period under review, which negatively impacted earnings by about R1.46/share.
Furthermore, the strike action at Secunda resulted in a 16% drop in mining production at an additional net cost estimated at about R1bn or R1.06/share. Once-off items in the prior year of R2.3bn or R3.77/share also contributed to the Heps drop.
Sasol shares were 0.95% up on the JSE at R23.35 at 11:22.
The company will announce its half-year financial results on February 27.
