) announced slightly improved results for the six months ended
Dec 31, 2012, aided by higher sales volumes and a favorable
exchange rate, partially offset by lower oil and product prices.
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The South Africa-based petrochemicals group reported headline
earnings per share, excluding one-time items, of R23.89
(US$2.81), up from R23.34 earned during the corresponding period
South African Energy Cluster:
Within its South African energy cluster, Sasol Mining's operating
income increased 30% to R1.3 billion, buoyed by increased sales
prices and favorable currency fluctuations. These were partially
offset by reduced U.S. dollar export coal prices and lower
Sasol Gas generated an operating profit of R2.0 billion, up 39.0%
year over year. The positive comparison can be attributed to
higher gas prices and sales volumes.
Sasol Synfuels' operating profit jumped 26% to R12.5 billion,
mainly reflecting higher production volumes and positive foreign
exchange movements that more than made up for cost escalation.
Sasol Oil reported an operating profit of R907 million as against
R1.1 billion in the prior-year period. The decline primarily
resulted from reduction in volumes. To some extent, this was
offset by higher margins.
International Energy Cluster:
Sasol Synfuels International recorded an operating profit of R1.2
billion, up from R1.0 billion earned during the previous
half-year period. The improvement was due to stronger performance
at the Oryx gas-to-liquids plant in Qatar and favorable currency
Sasol Petroleum International incurred an operating loss of R707
million, as against an income of R121 million a year ago, mainly
reflecting depreciation of the company's Canadian assets on the
back of lower North American gas prices. This was partially
offset by increased production from Sasol's Mozambique and Canada
Sasol Polymers dived to operating loss of R2.4 billion, from a
profit of R546 million in the prior year comparable period. The
segment results were adversely affected by domestic margin
pressure and international translation losses, partially offset
by better volumes from South African operations.
Sasol Solvents' operating income was down to just R48 million,
from the previous year's level of R1.1 billion. Segment results
were affected by weak product prices and margins, whose effects
were partly mitigated by higher production volumes.
Sasol Olefins & Surfactants reported an operating profit of
R1.6 billion, a slight decrease from the income of R1.7 billion
during the corresponding period of 2011. The negative comparison
came on the back of margin pressure in the company's European
operations, almost offset by low U.S. ethane prices.
Operating Cash Flow & Capex
Sasol generated R21.4 billion in operating cash flows, a 5.7%
year-over-year decrease, primarily due to higher working capital,
somewhat nullified by higher operating income. The world's
largest producer of motor fuels from coal spent R14.4 billion in
capital expenditures during the period.
Sasol announced an interim dividend of R5.70 per share. The
dividend will be paid on Apr 15 to shareholders of record as on
Apr 12, 2013. The holders of American Depositary Receipts
("ADRs") will be paid on Apr 25, 2013.
Stocks to Consider
Sasol currently carries a Zacks Rank #3 (Hold).
Meanwhile, one can look at downstream operators like
Calumet Specialty Products Partners L.P.
NGL Energy Partners L.P.
), as well as domestic energy explorer like
Memorial Production Partners L.P.
) as attractive investments. All these firms - sporting a Zacks
Rank #1 (Strong Buy) - offer value and are worth accumulating at