Sasol Full-Year Profit Rises 32% on Record Oil Prices

By Carli Lourens

Sept. 8 (Bloomberg) -- Sasol Ltd., the world's biggest producer of motor fuel made from coal, said full-year profit rose 32 percent as crude oil prices climbed to a record.

Net income increased to 22.42 billion rand ($2.86 billion), or 36.78 rand a share, in the year to June 30, from 17.03 billion rand, or 27.02 rand, a year earlier, the Johannesburg- based company said today in a statement. Profit before one-time items was 38.09 rand a share, lagging the 38.50 rand median estimate of 13 analysts Bloomberg surveyed. The company appointed its first black and female chairwoman.

Sasol, South Africa's biggest company by market value, uses technology invented in Germany to turn coal into fuel including gasoline and diesel. It benefited from higher fuel costs as crude oil averaged $96.89 a barrel in New York trading, up 52 percent from a year earlier. Production and the average oil price will be higher in the current financial year, Sasol said.

``Higher product prices together with higher volumes and a focus on cost containment have enabled the company to deliver superior returns,'' Chief Executive Officer Pat Davies said in the statement. Earnings this fiscal year ``are expected to reflect robust growth on 2008,'' the company said.

Hixonia Nyasulu will replace Pieter Cox from Nov. 28 when she becomes chairwoman of the company.

Apartheid Legacy

Created in 1950 by the apartheid government the company was used during apartheid to shield the country from oil sanctions. It was sold to private investors in 1979.

Sasol also appointed Juergen Schrempp ``lead independent director'' to chair the board on matters including oil.

Fixed prices for about 30 percent of synthetic fuel output curbed income by 2.3 billion rand. Sasol expects ``a modest increase'' in the average oil price this fiscal year.

The company took an impairment charge of 362 million rand after cutting its stake in a Nigerian gas-to-fuels venture with Chevron Corp. Sasol will sell 27.5 percent to Chevron for an undisclosed sum, leaving it with 10 percent, after project costs more than doubled to about $6 billion.

Sasol is also selling a 10 percent stake in itself worth about 27 billion rand to black people disenfranchised by apartheid rule in the country's biggest black investors' deal.

Sasol gained 10 percent this year to 373 rand on Sept. 5, giving the company a value of 248.9 billion rand.

To contact the reporter on this story: Carli Lourens in Johannesburg at clourens@bloomberg.net