Sasol posts higher profits, US development nearing completion

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Sasol is applying for exemptions and postponements from the air quality act for its Infrachem plant in Sasolburg.

JOHANNESBURG - Energy and chemicals company Sasol recorded an operating profit of R41.7 billion for the year ending June 2014, up 7% from the previous year.

Headline earning per share rose by 14% to a record R60.16 in the year ended June 2014 from R52.62 in the year-earlier period‚ the group said on Monday.

The total dividend increased 13% to R21.50 per share from R19 per share in the year-earlier period.

President and CEO David Constable said: “Underpinned by a solid operational performance‚ ongoing business improvements and strengthened stakeholder relations‚ Sasol has outperformed our previous best efforts.

“This outstanding performance sets the platform for what is the beginning of a new era for the group. In this new era‚ our focus will be on becoming a leading monetiser of natural resources and a trusted partner to countries seeking to add value to their hydrocarbon reserves‚” Mr Constable said.

Sasol’s spent R39.5 billion in capital investment in the past year, 57% of which was invested in South Africa.

Acting chief financial officer Paul Victor said: “Our cash flow generation remains robust‚ which together with our under-geared balance sheet‚ allows us to increase dividends... at the same time‚ we are able to invest in new growth projects in southern Africa and North America.”

The Competition Tribunal fine of R534m, as well as a final loss on the disposal of a polymer company in Iran of R198 million led to an operating loss of R767 million at Sasol Polymers. This is an improvement from the operating loss of R1.5 billion in the prior year. Excluding these once off items of R732 million, the Polymers business was close to break even, according to the company.

The Tribunal’s penalty, which is under appeal by Sasol, was imposed for the companies’ pricing of propylene and polypropylene, which was found to be excessive.

Other chemical businesses recorded an operating profit of R3.6bn compared to an operating profit of R123 million in the prior year. The increase in the operating profit of the Sasol Wax business is due to a payment of R2.5 billion (EUR168.2 million) received from the European Commission. The Court reduced a 2009 fine paid by Sasol to the European Commission from EUR318 million to EUR150 million. The European Commission can appeal this latest decision.

A loss of R332 million in the Sasol Nitro business is attributed to prolonged industrial action in the platinum mining sector and lower international nitrogen fertiliser prices.

Sasol’s chemical complex in Louisiana in the United States, with a 1.5 million tons per annum ethane cracker and six ethylene derivative units, is at an advanced stage. The company reports that front-end engineering and design work is near completion. 

Air, water and wetlands permits for the ethane cracker and derivatives complex and the gas-to-liquids (GTL) and chemical value added facility have been issued without any challenge or objections.

- INet
 

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