Sasol to take oil price knock

Johannesburg - Synthetic fuels producer Sasol () warned on Thursday that earnings per share and headline earnings per share for the six months ending 31 December 2009 are estimated to decrease by at least 45% compared to the prior year comparable reporting period.

The group said that oil prices and commodity prices experienced in the 2010 financial year to date are much lower than the peak prices achieved in the prior year comparable period and the earnings decline was further exacerbated by the negative impact of a significantly stronger rand.

"Due to continued volatility, Sasol is unable at this time to give a more precise indication of how much this decrease will be, but a more accurate estimate will be given once the half year has closed and we have greater certainty," Sasol said.

"The expected decrease in earnings is mainly due to the significant strengthening of the rand against the US dollar and a decrease in average crude oil and product prices compared to the corresponding six months of the previous reporting period.

"In addition, our results may be impacted by further changes in the oil and product prices, volume variances, the impact of a stronger rand on closing financial assets and liabilities as well as any adjustments resulting from our half year-end process. This may result in a change in the estimated earnings," the group added.

Sasol emphasised that Thursday's trading update deals only with the first half of the 2009 financial year comparison. "The very low earnings base of the second half of the 2009 financial year will strongly influence a comparison of the full 2010 financial year's results with 2009 and guidance in this regard will be given in due course," the group added.

- I-Net Bridge