South Africa's Sasol half-year profit rises

JOHANNESBURG (Reuters) - South African petrochemicals group Sasol on Monday reported an 18 percent jump in half-year profit on the back of higher crude oil prices, a weaker rand to the U.S. dollar and higher margins in its speciality chemicals unit.

Cooling towers of South African petro-chemical company Sasol's synthetic fuel plant in Secunda, north of Johannesburg, are seen in this picture taken March 1,2016.REUTERS/Siphiwe Sibeko

Core headline earnings per share (HEPS), which strips out certain one-off items and is the primary profit gauge in South Africa, rose to 21.45 rand ($1.54) for the six months ended Dec. 31, 2018 from 18.22 rand in the same period a year earlier.

Still, Sasol said the result was hampered by a volatile oil price and lower-than-expected production and sales volumes.

“Our production and sales performance was mixed with largely lower-than-expected production in the first half of the financial year, mainly as a result of the longer than planned total shutdown at our Secunda Synfuels Operations (SSO),” said joint president and chief executive officer, Bongani Nqwababa.

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 10 percent from the year-ago period to 27 billion rand ($1.94 billion).

Earnings were also impacted by commissioning costs for its giant Lake Charles Chemicals project, which has not yet generated revenues, the firm said.

The plant in Louisiana, which saw the first of seven units start production this month, is expected to cost as much as $11.8 billion.

“Despite incremental cash flows from the project being deferred due to a schedule delay, we remain confident that the project will deliver the steady EBITDA run-rate of US$1.3 billion in financial year 2022,” said joint president and chief executive officer, Stephen Cornell.

Sasol declared an interim dividend of 5.90 rand per share, up 18 percent from 5.00 rand in the year ago period.

($1 = 13.9509 rand)

Reporting by Tanisha Heiberg; Editing by Gopakumar Warrier and Richard Pullin