Sasol's headquarters in Rosebank, Johannesburg. Picture: FINANCIAL MAIL
Sasol's headquarters in Rosebank, Johannesburg. Picture: FINANCIAL MAIL

PETROCHEMICAL and energy company Sasol has reported lower first half-earnings as it battles depressed oil and commodity prices.

On Monday, Sasol reported headline earnings per share (HEPS) of R24.28 for the six months to December 31 2015, a 24% decline compared with the year-earlier period. Operating profit fell 50% to R14.9bn.

Sasol said its profitability was adversely affected by a 47% lower average Brent crude oil price during the fiscal half year, although the effect of lower oil and commodity chemical prices was partly offset by a 24% drop in the average rand-dollar exchange rate during the period.

In addition, Sasol said its profitability was further hurt by a partial impairment of its share in the Montney shale gas asset of R7.4bn, due to a further deterioration of conditions in the North American gas market resulting in a 16% decline in forecasted natural gas prices.

Concerning its restructuring, Sasol said it had delivered actual cost savings of R3.1bn in the period under review and was on track to meet its savings target forecast of R4bn by the end of the 2016 financial year.

Dow Jones Newswires said as part of the continuing restructuring plan to remain profitable in the face of low oil prices, the company spent just more than R1bn in layoff packages in the 2015 fiscal year, and reduced its headcount by 7.4% to 30,919 employees.

Last year, Sasol appointed two internal executives to fill jointly the position being vacated by CEO David Constable, who will become a consultant to the group next year. Its chief financial officer, Bongani Nqwababa, and its executive vice-president of international operations, Stephen Cornell, will become joint-presidents and CEOs of the company from July 1. It appointed Paul Victor as chief financial officer.

Mr Constable said growth projects in Southern Africa and the US were being prioritised.

"Over the next three months, my successors and I will continue to work through a detailed handover plan to ensure a smooth leadership transition," he said.

Sasol declared an interim gross cash dividend of 570c per ordinary share.