Sasol Earnings May Post a 90% Profit Increase Due to Higher Oil Prices

Sasol Ltd. the largest producer of coal-based transportation fuels, announced that its earnings during the first half until December most likely increased by 90% compared to the earlier year as the company gained advantage from weaker rand and higher oil prices.

The anticipated rise in revenues was primarily caused by the solid performance of its businesses’ operations, the strong enhancement in the average product and crude oil prices and the weaker exchange rate between the dollar and rand according to a recent statement of the company.

The Johannesburg-based company has operations in different countries including Qatar, Iran, Mozambique and the United States. About sixty-six percent of its operating revenues for the financial year of 2011 were earned from its South African energy business.

Average crude oil price per barrel was 14 percent more in the six months until December. In particular, the price of crude was at $91.81 per barrel during that period compared to $80.60 per barrel during the earlier year.

According to compiled data by Bloomberg, the rand decreased in value by 16 percent versus the dollar during the same period and made it the third worst performing currency in the world next to forint of Hungary and zloty of Poland. During that time, the rand traded at 7.6227 a dollar. That is 6.7% lower than its 7.1137 average during the earlier year.

The company said that it benefited from foreign-exchange contract gains. Its shares are at a week-long high as its recent trading in Johannesburg is 1.1% higher at 407.02 rand.

By Chris Termeer