JOHANNESBURG (Reuters) - South African petrochemicals group Sasol said its expectations for a strong year had been boosted by a good quarterly performance at its synthetic fuels unit.
"We remain confident that, based on the production guidance and our macroeconomic assumptions, we will deliver solid operational performance and earnings for the (2012/13) financial year," chief financial officer Christine Ramon said on Monday.
Currency and oil price volatility were likely to persist given the uncertain global economic outlook, she also said in a trading update.
Output of synthetic fuels from July-September - its first quarter - rose 12 percent to 1.8 million tonnes. Sasol, the world's top maker of motor fuels from coal, kept its full-year production forecast at 7.2-7.4 million tonnes.
The quarter was also boosted by a weaker rand, which helps exporters as it lifts profit when overseas earnings are brought home. The average Brent crude oil price, however, softened and chemical prices remained depressed, hitting Sasol's chemicals units, where demand remained soft, the company said.
Sasol has been diversifying into chemicals, gas and clean-energy projects to benefit from low gas prices. Ramon said the company had reviewed its capital projects, including a plan to build gas-to-liquid (GTL) plants in North America.
In the United States, Sasol will proceed with engineering studies for a 96,000 barrels-per-day GTL and chemicals facility, expected to cost $11-$14 billion and be completed by 2019.
It will also do further studies on an integrated ethane cracker complex there, estimated to cost up to $7 billion and seen as being completed by 2017.
Both estimates have gone up from previous estimates due to changes in design and higher costs.
A GTL project in Canada will be put on hold.
Sasol were down 1.6 percent to 368.84 rand by 1125 GMT.
"We are still long-term positive on the stock, but the delay to the Canadian GTL is disappointing," Vestact analyst Sasha Naryshkine said. "People want to see smooth earnings but also headway in project execution."
Sasol, which last year put on hold development of a coal-to-liquids plant in China, said it was still in talks about divesting its 50 percent stake in Iranian venture Arya Sasol Polymer Company. While there was uncertainty about fair value, headline earnings per share would not be hit, it said.
Source: http://news.yahoo.com/sasol-sees-solid-earnings-production-122315065--finance.html
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