Sasol reports 93% increase in earnings, share rise over 10%

SASOLS share price shot up over 10% on Monday after headline earnings a share increased by 93% for the year to June 30, as it began to deliver on its Capital Markets Day (CMD) commitments it had outlined in May, and it reported less write downs.

- EDWARD WEST

“We have delivered pleasing results in areas within our control particularly margin realisation, managing cash fixed costs, and optimising capital spend. These actions are building greater resilience... they give us confidence in ...enabling us to reinstate dividends and support investment in future growth and transformation,” said CFO Walt Burns.

The share price was trading at R119.80 on Monday afternoon on the JSE, continuing a steady recovery since the CMD, but it was still below the R147.96 that it was trading at on the same day a year ago.

Free cash flow increased by 75% to R12.6 billion, aided by the receipt of the Transnet legal settlement payment. The strong free cash flow helped strengthened the balance sheet and debt reduced 11% to $3.7bn, and the group continued to have a strong liquidity position of more than $4bn. Total impairments of R20.7bn were much lower than last year’s R74.9bn.