South Africa’s Sasol Expects its Q1, Q2 Profit to Fall 28%

South Africa’s Sasol Expects its Q1, Q2 Profit to Fall 28%

South Africa’s Sasol, the world’s biggest producer of liquid fuels from coal, announced that it expected its half-year earnings to drop by up to 28%, adding that lower oil and chemical prices could further hurt its overall performance this year, Reuters reported.

Sasol, which makes about 40% of its revenue from oil, was hit hard by depressed oil prices, with its shares falling 14%. Business was “negatively impacted by challenging and highly volatile global markets, marked by a steep decline in global oil and commodity chemical prices,” the company said in a statement.

Brent crude oil, an international benchmark, plunged 41% in the second half of 2015, and prices for a basket of Sasol’s commodity chemicals fell 23% from the same period a year earlier, Bloomberg wrote. The company mitigated declining commodity prices by boosting production at its Secunda synthetic-fuels operations by 3% in Q3 and Q4, compared with the same period a year earlier. Total liquid-fuel production for its energy business increased 4%.

Nigeria and Venezuela, members of the Organisation of the Petroleum Exporting Countries (OPEC) have called for cuts to bolster the oil price, which has halved since last May, however, until this week there were little signs that the big players would cooperate.

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