Sasol sees full year profit falling as much as 11 percent on R16bn of charges

By Ana Monteiro

(Bloomberg) – Sasol Ltd. said full-year profit probably fell as the world’s biggest producer of fuel from coal takes a R16 billion ($1.2 billion) depreciation charge and accounts for expenses on share-based payments.

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

A logo sits on display outside the Sasol Ltd. headquarters in Johannesburg. Photographer: Waldo Swiegers/Bloomberg

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 percent 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 $11 billion ethylene plant in Louisiana completing the company’s conversion into a global chemicals player.