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South Africa's Sasol earnings attributable to shareholders increased 114%

Staff Writer | February 25, 2019
Sasol released interim financial results for the six months ended 31 December 2018.
Sasol   Sasol underlying cash generation remains sound
Sasol underlying cash generation remains sound, with earnings before interest, tax, depreciation and amortisation (EBITDA) increasing 10% to R27 billion when compared to the prior period and normalised cash fixed cost contained to below our inflation target.

Sasol earnings growth was, however, slower than expected due to volatility in the oil price and lower than expected production and sales volumes.

As Sasol is in the commissioning phase of the LCCP production units, the delay in income from these units will result in lower earnings due to costs being recognised without corresponding revenues.

Earnings attributable to shareholders for the period ended 31 December 2018 increased 114% to R14,7 billion from R6,9 billion in the prior period, largely due to the significant re-measurement items recorded in the prior period.

Headline earnings per share (HEPS) increased 32% to R23,25 per share and earnings per share (EPS) increased 112% to R23,92 per share compared to the prior period.

Core headline earnings per share (CHEPS) increased 18% to R21,45 per share compared to the prior period, mainly as a result of higher average crude and product prices, the effect of the weaker rand/US dollar exchange rate and higher margins in specialty chemicals measured in rand terms.

This was partially offset by lower than expected production and sales volumes due to the extended shutdown at SSO and external ethylene supply constraints which impacted Sasol European operations. Post the shutdowns, we are seeing much improved production in all of our units with SSO performing at run-rates indicative of 7,8 million tons (mt)/per annum.