Capex Glug-Glug

I cannot believe that it has been more than ten years since Sasol listed on the NYSE, I remember that day, Ernie Els bought the first share (yes, really!) and he was interviewed by the networks on the floor. Another bigger event happened that day, the US armed forces and in particular a tank had attached a chain to a Saddam Hussein statue in Baghdad and the whole thing toppled over. It was pretty dramatic, obviously the falling statue of Hussein was going to trump the Sasol listing, even though it should not have. Don't ask me my opinions about wars and violence, it deflates me.

Sasol were possibly one of the very few listings at the time, I cannot imagine too many people wanting to get involved in 2003 after the pasting that everyone took during the technology boom and the corresponding melt down. Sadly many folks were burnt badly. What has gone Sasol's way is that oil prices have increased to a new stable point around 100 Dollars a barrel, but the Rand has also weakened. Both in their favour. And what we said yesterday, this is still very much a Synfuels business, see that the local division contributes the lions share of profits.



Capex, well, that was nearly 40 billion Rand, of which 57 percent was invested locally. What is going to happen over the next two years, 2015 and 2016? Well, they are going to invest 115 billion Rand and of course much of that in building a huge presence in the US. The go ahead has not been finalised, as the company said in the results presentation, a decision will be made before the end of the year. And if you needed reminding, the end of the year is a mere 113 days away. Yes.

We are going to have to continue to do our homework on what is always a complicated set of numbers, there are many moving parts, project write downs (particularly bad for the Canadian gas asset) and indeed amendments to strategy, which for us is most important. The selling of assets in places that would not be desirable should you require a mainland US presence has happened. And by that I mean Iranian assets, even though the project certainly had its merits, US investors would consider this a big no. The share price continues to move northwards, we are obviously pleased by that. More tomorrow.