JOHANNESBURG, February 22 (ANA) – Integrated energy and chemical company Sasol said on Monday its headline earnings per share increased by more than 100 percent to R19.16 (US$1.29) in the six months ended December compared with the same period the previous year.
Sasol said despite a 23 percent decrease in the rand/barrel oil price, its adjusted earnings before interest, taxes, depreciation and amortisation decreased by only six percent.
“This achievement is as a result of a strong cash cost, working capital and capital expenditure performance in response to the challenging environment,” it said.
The company said it had decided not to pursue a rights issue given the current tough macroeconomic outlook and the significant progress made on its response plan initiatives.
While cash flows were impacted by low crude oil prices, softer chemical prices, plant downtime and the impact of Covid-19, its cash conservation initiative and asset divestment programme enabled the company to repay approximately R28 billion (US$1.9 billion) of debt.
“Given our current financial leverage and the risk of a prolonged period of economic uncertainty, the board believes that it would be prudent to continue with the suspension of dividends,” Sasol said.
“We expect the balance sheet to regain flexibility following the implementation of our comprehensive response plan strategy.”
Last Friday Sasol approved the final investment decision on the Mozambique Production Sharing Agreement (PSA) license area, a project estimated to cost US$760 million.
On Monday, it said the project would entail Mozambique in-country monetisation of gas through a 450 megawatt gas-fired power plant and a liquefied petroleum gas facility in the same time frame.
“The balance of the gas produced will be exported to South Africa to sustain our operations,” said Sasol.
“The PSA development underpins Sasol’s gas transformation strategy by securing additional gas supply from southern Mozambique into Sasol’s gas value chain starting 2024 and serves as a cornerstone in addressing Sasol’s sustainability agenda.”
– African News Agency (ANA), Editing by Stella Mapenzauswa