Samuel Mungadze

Favourable world crude oil prices and the weaker rand will be in favour of JSE-listed resources giant Sasol when it announces results for the six months ended December last year.

In a trading statement, Sasol advised shareholders that interim earnings per share and headline earnings per share were estimated to increase by between 80% and 90% compared to the prior comparable period. This is an upward adjustment to an earlier update, which had said earnings were likely to improve by at least 45.

“The expected increase in earnings was mainly due to solid operational performance in our businesses, coupled with a strong improvement in the average crude oil and product prices and a weaker rand/US dollar exchange rate,” read the statement.Continued tensions in the Middle East and Libya have forced the oil price to remain high resulting in oil companies cashing in, including Sasol. Benchmark prices currently stand at slightly below $99 (R763) per barrel in the US and slightly above $107 in Europe.

There are fears that if the debacle continues much longer, new record prices above the 2008 historical high of $150 will be reached again and these companies will be the main beneficiaries.

Sasol said the results have been positively affected by exchange gains on foreign exchange contracts and alluded to the fact that the results may be impacted by further changes in oil and product prices, volume variances, and the impact of closing exchange rates on financial assets and liabilities.

“Our half-year closure process is in progress and further adjustments may arise including re-measurement effects,” said Sasol. “The higher earnings base of the second half of the 2011 financial year will strongly influence a comparison of the full 2012 financial year’s results with 2011.”

Sasol will announce its results for the period under review on March 12, 2012.

samuelm@thenewage.co.za