Sasol joint-CEO Bongani Nqwababa. Picture: MARTIN RHODES
Sasol joint-CEO Bongani Nqwababa. Picture: MARTIN RHODES

Sasol raised its interim dividend by 18% to R5.90 — good news for shareholders after five years of belt-tightening during which the R8 paid in the first half of its 2014 financial year fell to R4.80 in the first half of its 2017 financial year.

The New York- and Johannesburg-listed chemicals group reports in both rand and dollars.

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In rand, attributable profit more than doubled to R15.9bn for the six months to end-December from R7.7bn. In dollars, attributable profit growth was slightly lower — 94% versus 106% — rising to $1.1bn from $577m. 

The group’s improved profitability was partly thanks to a R1.3bn victory in a tax dispute with the SA Revenue Service (Sars).

Interim turnover grew 17% to R103bn.

Image: Iress

In its home market, production losses from a longer-than-planned shutdown at its Secunda synfuels operations were offset by improvements at Natref and its mining division, joint-CEO Bongani Nqwababa said in the results statement.

Better production from Natref helped Sasol’s liquid fuels sales volumes grow 4%.

But sales of Sasol’s performance chemicals division declined by 3%, “mainly as a result of a force majeure in Europe triggered by external ethylene supply constraints”.

Base chemicals sales volumes fell 11%, which Sasol blamed on the Secunda shutdown, along with a drop in fertiliser demand.

Sasol’s other joint-CEO, Stephen Cornell, acknowledged “the disappointing cost and schedule overrun” at its Lake Charles chemicals project in the US.

“Our earnings growth was, however, slower than expected due to volatility in the oil price and lower-than-expected production and sales volumes. As we are in the commissioning phase of the Lake Charles production units, the delay in income from these units will result in lower earnings due to costs being recognised without corresponding revenues.”

laingr@businesslive.co.za