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Yesterday Sasol released their trading statement for the first 9 months of their financial year. Below is their operational performance.
The financial details are vague due to this being an interim statement but most of the numbers seem to be pointing in the right direction. Their production numbers are up and the Rand is 20% weaker this year compared to last year. Having the selling price of their goods guided by what the Rand is doing a weaker Rand is a good thing.
The first number to stand out is the 3% drop in their Canadian Shale Gas asset. The Canadian assets consists of Sasol's 50% share in two gas fields. These are the same gas fields that they took big write downs on previously, caused by lower natural gas prices.
The biggest rise in production is in their ORYX GTL plant located in Qatar which they own 49% of. The reason for the big increase in production is due to the plant having been down for maintenance in the previous period. It currently runs at 93.5% capacity and they expect it to be higher in the remaining months of the year.
The most important number though is their synfuels business which accounted for R28.6 billion of their R40.6 billion in operational profits. Comparably the synfuels operation is up 4%, and for the full year they expect to be at the top end of their volume guidance.
A feather in their cap would be "Based on our interactions with Standard and Poor's (S&P), and after having performed a sovereign stress test, S&P revised its outlook on Sasol from negative to stable on 15 May 2014"
There was nothing major in the announcement, which was seen by the share price not moving much. The reason to buy the company is if you think that natural gas is the future for energy generation in the world. As it is from where I sit, natural gas will be the step between fossil fuels and renewable energy.