Share

Sasol's good times deferred

Johannesburg - An expected 45% drop in Sasol's interim earnings to end-December might have been what the market expected, but investors will have to wait till the middle of 2011 for the firm to get back on track, said an analyst.

The petrochemical giant warned investors on Thursday of its lower earning expectations on the back of the strengthening rand (against the dollar), a decrease in average crude oil prices and lower product prices. "A more accurate estimate will be given once the half-year has closed and we have greater certainty," Sasol said.

In an interview with Fin24.com Mani James, chemicals programme manager at Frost & Sullivan, said he anticipates mid-2011 to be a good time for investors to pick up Sasol shares.

According to James, for the time being the petro giant will be marred by its many competition issues and high capex investments. "It's [Sasol's performance is] going to be a sticky situation."

Commenting on its capex plans, Sasol's chief financial officer Christine Ramon said despite the group's expected lower earnings, its capital expenditure guidance of R15bn for the 2010 financial year remains unchanged. She forecast capital expenditure of R17bn in 2011.

Oil hedge

Sasol has consistently hedged 30% of its synfuels production over the past five years, but the firm has still not renewed the oil hedge for the 2010 financial year.

"This is subject to ongoing review, especially in the light of current market volatility and our low gearing levels," said Ramon.

"We currently expect to be at the upper limit of our previously disclosed average oil price forecast of $65 to $70 per barrel for financial year 2010."

On Thursday afternoon, Sasol was trading down 2.53% at R289.00 per share.

Broker consensus compiled by data supply firm McGregor BFA has Sasol on a "buy".

- Fin24.com

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.92
+0.1%
Rand - Pound
23.88
+0.1%
Rand - Euro
20.39
+0.2%
Rand - Aus dollar
12.32
+0.1%
Rand - Yen
0.13
+0.0%
Platinum
908.05
+1.2%
Palladium
1,014.94
+1.3%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders