Sasol earnings up 14% on weak rand, higher chemical prices

JOHANNESBURG (Reuters) – South African petrochemicals company Sasol reported a 14 percent increase in full-year earnings on Monday, boosted by higher chemical prices and a weaker rand currency, but the result fell short of analysts' expectations.

Diluted headline earnings per share rose to 59.64 cents from 52.53 cents the previous year, below a Reuters forecast of 63.4 cents, based on a poll of 11 analysts.

Sasol said the economic outlook in its domestic South African base "remains challenging as the country is still recovering from a five-month long strike in the platinum sector, with business and consumer confidence levels remaining low."

It also said that rand exchange rate and oil price assumptions, the biggest external factors impacting the company's margins, could be volatile because of increased geopolitical tensions and the likelihood of rising interest rates in the world's top economies.

Sasol said it still expected a solid production performance for the 2015 financial year and forecast capital expenditure of 50 billion rand ($4.7 billion) for 2015 and 65 billion rand for 2016.

The group also said it had obtained all the air, water and wetlands permits for its mega-projects in the southern U.S. state of Louisiana, an ethane cracker and derivatives plant and an integrated gas-to-liquids and chemicals facility, which are expected to cost around $16 to $21 billion to build.

"We are making good progress on the financing," Sasol said.

While Sasol's synthetic fuels business remains its revenue driver, the company has increasingly diversified into chemicals and gas and clean-energy projects.

(1 US dollar = 10.7080 South African rand)

For the full SENS report, Click Here