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Sasol sees profit falling up to 11% on R16bn charge

Jul 20 2018 09:19
Ana Monteiro, Bloomberg

Sasol [JSE:SOL] said full-year profit probably fell as the world’s biggest producer of fuel from coal takes a R16bn depreciation charge and accounts for expenses on share-based payments.

Core headline earnings per share probably declined 1% to 11% in the year ended June 30 from the R38.47 reported 12 months earlier, the Johannesburg-based company said in a statement on Friday. Profit was also hit by R1.5bn of employee share-based payment expenses, it said.

The stronger rand “resulted in a much lower operating profit and earnings per share for the financial year”, the company said.

Sasol benefits when the rand is weaker because most of its products are sold in dollars, while its costs are mainly in the South African currency.

Brent crude, to which Sasol’s revenue is linked, rose 31% in the year to June and are at $72.22 a barrel.

Sasol, which built its business making fuel from coal to shield apartheid-era South Africa from sanctions, is transforming itself, with the start-up of an $11bn ethylene plant in Louisiana completing the company’s conversion into a global chemicals player. 

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