Sasol sees strong headwinds continuing
Sasol said on Monday that headline earnings per share were down by 24 percent in the six months to the end of December 2015 despite better-than-expected results from restructuring programmes, which had now been updated and extended.
Headline earnings per share came in at R24,28, down from R31,92 in the corresponding period last time, as profit from operations decreased by 50 percent to to R14,9 billion “on the back of challenging and highly volatile global markets”.
A statement from the South African petrochemicals and energy company added, however, that it had “continued to maintain momentum by focusing on factors within our control”.
“Despite the challenging macroeconomic environment, we continued to deliver a strong operational performance, with increased production volumes and cost increases contained to well below inflation,” the statement said.
The period under review was characterised by a further steep decline in oil and commodity chemical prices, with oil prices down by a devastating 47 percent.
Sasol said, however, that both the company’s business performance enhancement programme and its low oil price response plan had overshot targets on cost savings and conservation.
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The company added that it had now revised and extended its response plan through to the 2018 financial year in anticipation of a lower oil price environment.
An interim dividend of 570 cents per share was declared, down from 700 cents in the comparative period last time.
Chief Executive Officer David E. Constable said: “The decisive actions taken to reposition Sasol through our business performance enhancement programme and our low oil price response plan place the organisation in a good position to maintain a strong operational performance, despite the challenging and volatile energy landscape.
“Given a ‘lower-for-much-longer’ oil price scenario, we have intensified and extended the scope of our response plan, by derisking and rephasing certain projects, while prioritising capital for the advancement of our growth projects in Southern Africa and the United States.”