Sasol still sizzling

Sasol. The company that many South Africans associate with the fuel industry and possibly one of the most recognisable businesses in these parts. The company has released results for the full year to end June 2014. They are pleasing, records all around, headline earnings at 60.16 Rand a share (up 14 percent), the dividend increasing 13 percent to 21.5 Rand per share (18.275 Rand after tax, 11.475 for the second half). I quite enjoyed the prepared comments from CEO David Constable (whom I also like quite a lot), who said the following:

"Over the last three years, the compounded annual growth rate of headline earnings per share increased by 21%, and dividends by 18%. This outstanding performance sets the platform for what is the beginning of a new era for the group."

Then more importantly:

"In this new era, our focus will be on becoming a leading monetiser of natural resources, and a trusted partner to countries seeking to add value to their hydrocarbon reserves."

That is pretty broad of course, the suggestion is that if you have the reserves and you are looking for someone to tailor their needs to your abilities, Sasol are saying that they have the perfect solution for you. Sasol have had to do a u-turn on their coal to liquids expansion programs in both India and China, those were exciting at the time, less so in a world (post Copenhagen 2009 Earth world summit) that is more conscious of pollution and committed to air cleanliness. Ironically we were one of the countries that drafted the accord.

So Sasol changed paths, in part the shale gas revolution in the US and the North American CEO made it easier to decide on expansion on mainland USA, a place called Lake Charles in Louisiana, quite far South. Nice and warm there. More on these results tomorrow, we will take a longer and more focused look at the numbers. The market has reacted favourably, the stock is up around one percent in early trade.