Sasol have released their full year numbers this morning

Sasol have released their full year numbers this morning. The key highlights are that earnings are up 17 percent to 2668 cents a share, 15.9 billion Rands, the dividend up 24 percent to 1050 cents a share. Some folks are already impressed operationally, and that the management have "come good" after having perceived to have underperformed for a while.



Synfuels is still the big daddy inside of these results, even though "operating profit decreased by 48% to R13 175 million compared with the previous year." Synfuels international still making some good headway, Oryx running at 90 percent capacity, but the division as a whole is still very small.



Sasol solvents had a cracking (no pun intended) year, so did Sasol Olefins & Surfactants. The European business also had a strong turnaround, remember that they incurred a huge fine there from the EU competitions authorities, that is by far and away the biggest fine that they have got. So far.



In fact they make pointed reference to the competitions issues: "Regarding competition law, we continue to focus on enhancing Sasol's competition law compliance processes and systems throughout the group. There are matters that remain subject to investigation. The South African Competition Commission (the Commission) has initiated investigations in respect of some of the industries in which Sasol participates, including the South African piped gas, coal mining, petroleum, fertiliser, wax and polymer industries." So, in short everywhere is being looked at, this is for investors the stinkiest part of their business over the last couple of years.



There is so much on the go. So much. "In December 2009, the Project Application Report for the China coal-to-liquids (CTL) plant was submitted to the Chinese Government for approval. We are expecting a decision thereon in the second half of the 2011 financial year." And also in some "interesting" parts of the world, "the feasibility study for the Uzbekistan GTL plant is expected to be completed by the end of the second quarter of the 2011 financial year."




And then of course Project Mafutha, my favourite named project. As Sasol says "coal has been transported to Secunda and the coal gasification trials are scheduled and planned for completion during the latter half of the 2010 calendar year." And then there is that interesting stuff in the middle of the Karoo, prospecting for shale gas. Although this is so new, don't expect anything for a long time.



Sasol are still cautious in their outlook all the way through next year. This line could be a copy paste (but is not) from almost anyone else lately: "While there has been some stability in global markets and it is anticipated that this will continue, the potential sovereign debt crisis in Europe indicates that the recovery in the global economy appears to be fragile."



Production volumes across the group are up, and demand and pricing is more in Sasol's favour. Less volatile pricing is always a huge plus, and in fact the fact that no hedges were entered into, was I guess in their favour. They do state the obvious; "the strength of the rand/US dollar exchange rate remains the single biggest external factor exerting pressure on our profitability."



The future as ever is unknown, and it almost seems like an apology on their part to be more certain, that is how I read the line: "The current volatility and uncertainty of global markets make it difficult to be more precise in this outlook statement." Over the coming days we will be sending clients a detailed update on the company's results as we see it.