Sasol profit plunges on oil-price drop, R7.8bn writedown

Sasol’s R7.8 billion writedown in parts of its South African and Mozambican businesses, together with a decline in oil and chemical prices, triggered a drop of as much as 99% in half-year profit.

The South African fuel and chemicals maker expects earnings per share in a range between R0.10 and R0.80 for the six months ended December 31, compared with R7.22 a year earlier, it said in a statement Thursday.

Read: Sasol declares force majeure on natural gas supply

The Johannesburg-based company is booking a R3 billion impairment on its Secunda liquid-fuels refinery in South Africa, which remains fully impaired. It’s also writing down R3.9 billion on its production-sharing agreement it Mozambique after a revision on production timelines delayed monetisation.

Sasol is the biggest producer of liquid fuels from coal. A 17% decline in the price of Brent crude in rand terms, together with a 3% drop in the average chemicals basket price in dollar terms, contributed to the decline in profit.

Read: Sasol adds seasoned energy executive Rhidwaan Gasant to its board

Sasol uses coal to make most of its products and is the second-biggest polluter in South Africa. Its plans to lower emissions include substituting the dirtiest fossil fuel with natural gas, adding renewable energy and potentially green hydrogen.

Read: Secunda stabilisation gives Sasol breathing room

Adjusted earnings before interest, tax, depreciation and amortisation will decline by a range of 4% to 21% to between R19 billion and R23 billion.

Read the Sens here.

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