Research archive for SOL

Every six months Sasol come out with a newsletter written by CFO Christine Ramon which provides key updates on company events which includes major capital projects and forward looking predictions. It's a great way to get a feel for the company, what they are about and where they are headed. I think more companies should do this type of thing, at the end of the day the more informed you are about a company the more comfortable you will feel about investing in them. Let's take a look at what she says and try summarise it somewhat but if you are interested in reading the whole thing, here is the link.

On Friday Sasol announced the completion of a second acquisition of a 50% participation interest in the Montney Gas Basin in Canada. This was communicated to shareholders in the beginning of March but was subject to certain conditions which have all been fulfilled and the transaction has officially closed. It is by no means a small transaction. CAD$1050 million or R7bn is the size of a Grindrod or a JD Group.

It's gone under the radar somewhat. Maybe the unions are too focused on the Massmart-Walmart deal and this is next on their agenda. I'm talking about Sasol's appointment of Canadian born David Constable who is currently Fluor Corporation's group president of operations, as their new CEO. His tenure starts on the 1st of July when Pat Davies steps down. Let's look at his credentials and whether this looks like a good decision bearing in mind that Sasol is a proud South African multinational and having a white male foreigner at the helm may not go down so well with the authorities.

Sasol have released half yearly results this morning. We have owned this company in the portfolios since inception of our business, but did drop it briefly for concerns over the firming currency. We have matured in our approach to investing over time and roll with the punches. Of which in late 2008 and early 2009 it felt like we had gone 15 rounds with Joe Frazier. And then another 15 with Ali. Remember that? I do, it hardens resolve. Makes you appreciative of the good times. And as a friend in the industry often says, it gives the fresh entrants into the market little reference point, to lift the existing participants.

Sasol made an interesting announcement yesterday stating that they are going to cancel a proposed Coal to Liquids (CTL) facility in Indonesia. The proposal was not even close to pre-feasibility so not too much of an impact on the share price. It does bring up some interesting questions though.

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.

Sasol fine. This is not good and not the ja no well fine. Pat Davies must be outraged and must be thinking of throwing cell phones, the kind of behaviour that ditsy supermodels like Naomi Campbell display. Obviously no dirty little stones and testimony at war crimes tribunals at The Hague, but the competitions authorities investigating the company again is making one tired. This time at Sasol Chemical Industries or SCI, which you must remember includes some big European businesses. According to the Sasol website, SCI ".. is the world's largest producer of chemicals from synthetic fuel co-products."

Sasol Nitro yesterday afternoon making public the extent of the fine that the company received from the competitions authorities, and ending a dirty saga that has plagued the company for a number of years. Even though this means that the company will restructure their fertiliser business, the company still believes that they did not engage in any practices that led to the enquiry. Which is interesting in itself. Nevertheless the company has been proactive and have approached the competitions authorities with the following proposals:

Sasol with a business update as well as the chief staying on an extra year, into 2012. Looks all rather positive, including some new developments, specifically with the extraction of shale gas, that might well mean entering the American markets sooner than we might have expected. The Reserve Bank released their quarterly bulletin yesterday, what does it all actually mean for the ordinary folk and is the European crisis starting to bite us, remember that they are an important trading partner. And some other data, real on the ground data that always deserves another look, the Mooi River index.

Sasol announcing yesterday that they are going back to their old dividend paying ways. The company cites an improving outlook, a dark recent past and return to the long term track record of rewarding shareholders. In short here are the reasons given for having toned the dividend down. In fact I can remember that the company at the height of the crisis were considering a scrip dividend alternative:

Sasol with their results out this morning for their first half to end December 2009. Highlights include a dividend increase, lowlights, Headline Earnings per share down 51 percent to 1067 cents. Pat Davies, the chief, sums it up in his first line of the commentary: Our deliberate, intense efforts on operational improvement and cost reduction have resulted in an overall improvement in volumes and a reduction in unit cash costs.