PETROCHEMICAL company Sasol yesterday flagged that it was set to deliver a mixed set of results for the six months ended December 31, 2021, with its headline earnings dented 26 percent as operational challenges knocked its performance and despite improved Brent crude oil prices.
Headline earnings per share were likely to be between R14.25 and R16.17, a decrease of between 16 and 26 percent from the prior comparative reporting period.
Earnings per share were expected to be between R22.81 and R25.15, representing a change of between 3 and 7 percent.
But the improved Brent crude oil price, refining margins and chemical prices had resulted in a notable gross margin improvement from the prior half-year, combined with strong cost and capital expenditure performance.
“These benefits were partly offset by operational challenges in our South African value chains,” Sasol said.
Adjusted earnings before interest, tax, depreciation, and amortisation for the period was expected to increase by between 66 and 76 percent to between R30.9 billion and R32.7bn.
Non-cash adjustments, before taxation, included unrealised losses of R4.9bn on the translation of monetary assets and liabilities and valuation of financial instruments and derivative contracts; and remeasurement items net gain of R5.8bn mainly due to a gain of R4.9bn on the realisation of the foreign currency translation reserve on the divestment of Sasol Canada’s shale gas assets.
Adding to unrealised losses was a R1.4bn reversal of impairment on the chemicals work due to a higher price outlook on the back of a sustained increase in demand for alcohols into the personal hygiene market during and post the Covid-19 pandemic.
Last month the group said its Secunda Operations production forecast, after being revised downwards in December due to challenges with coal availability and quality, was now producing above the amended plan.
Sasol will release its interim financial results on February 21.
dieketseng.maleke@inl.co.za
BUSINESS REPORT ONLINE