Sasol Ltd. (SOL) rose to its highest in six months after full-year profit increased and the largest producer of motor fuels from coal raised its dividend 35 percent.
Sasol rallied 2.6 percent to 383.66 rand at the close in Johannesburg, its highest since March 14. The stock has gained 8.5 percent in the last three days as oil traded near the highest level in a week in New York amid speculation that the U.S. and China will implement measures to revive their economies.
Earnings excluding one-time items climbed 25 percent to 42.28 rand a share in the year through June as oil prices gained and the rand weakened against the dollar, Johannesburg-based Sasol said in a statement. The dividend was raised 35 percent to 17.50 rand a share, it said. Sasol benefits from rising energy prices because its fuel prices are linked to crude oil. The company also gains from a weaker rand because most of its products are sold at dollar-denominated prices, while it meets most costs in the South African currency.
“The company posted very solid results and are giving a good increase in the dividend,” David Shapiro, a director at Johannesburg-based Sasfin Securities, said by phone. “Sasol has been one of the cheapest stocks and these results highlight its attraction.”
Sasol trades at 9.1 times earnings while the broader FTSE/JSE Africa All Shares Index (JALSH) trades at 13.7 times profit.
Sasol uses proprietary Fischer-Tropsch technology to make gasoline, diesel and jet fuel from coal it mines in South Africa and natural gas from below the ocean floor near Qatar.
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