(Reuters) – South African petrochemical group Sasol said on Tuesday it expects its half-year profit to double, driven by strong oil prices and despite operational challenges in its domestic unit.
Sasol expects its headline earnings per share (HEPS)- the main profit measure in South Africa – to be between 29.84 rand and 31.36 rand ($1.69-$1.78) in the six months to December 2022, compared with 15.21 rand in the same period a year earlier.
The world’s biggest producer of fuel products and chemicals from coal said the benefit of a weaker rand as well as higher oil prices and refining margins was offset by weaker global economic growth, depressed chemicals prices and higher input and energy costs.
“Our South African operations also experienced several operational challenges, most notably in the mining business, where coal productivity and quality have been below plan,” Sasol said in a trading update.
Poor rail performance, port constraints and power outages in South Africa had impacted sales volumes during the six months, Sasol added.
Last week, Sasol said its coal exports fell 25% during the half year to 900,000 tonnes due to rail logistics problems as well as safety and operational outages at its mines.
State-owned rail operator Transnet’s under-performance, blamed on a shortage of locomotives and spare parts as well as cable theft and vandalised infrastructure, has hobbled South African coal exports at a time of high demand, especially in Europe, after the European Union banned imports from Russia after it invaded Ukraine.
Sasol will release its half-year results on Feb. 21. ($1 = 17.6230 rand)
(Reporting by Nelson Banya; Editing by Savio D’Souza)
