Sasol said first-half profit fell 63 percent as crude and chemical prices slumped and the world’s biggest producer of liquid fuels from coal wrote down the value of the Montney shale-gas asset in Canada.
Attributable profit dropped to R7.3 billion ($474 million) in the six months through December as it booked a R7.4 billion impairment on Montney, the Johannesburg-based company said in a statement on Monday. Sasol declared an interim dividend of R5.70 a share, down from R7 in 2015.
“Oil prices are currently subjected to sentiment-driven volatility and while some fundamentals indicate that the oil-industry cycle is poised to turn, it remains difficult to determine when this will happen,” Sasol said in the statement.
Sasol said it met targets to conserve cash as benchmark Brent crude declined by an average of 47 percent over the period and the company’s basket of commodity chemicals fell 23 percent from a year earlier. While the price declines were partly offset by the South African rand’s weakening against the dollar, Sasol also took a R7.6-billion impairment charge on its interests in Canada’s Montney shale-gas basin.
Liquid-fuels production rose 4 percent from a year earlier while volumes of base chemicals declined.
Earnings excluding one-time items fell to R14.8-billion, or R24.28 a share, from R19.5-billion, or R32, a year earlier, it said.
Source – iol