Sasol - Implications of the Rand at R14/USD

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Sasol - Implications of the Rand at R14/USD

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Published Date: 2019-07-16 | Source: INCE|Community | Author: Mark Ingham

Sasol - Implications of the Rand at R14/USD

Ingham Analytics has adjusted earnings estimates and assume a lower oil price and chemicals prices. Whilst there is negative free cash flow after expansion capital expenditure in F2019, they observe that this will change significantly for the better from F2020 onwards and quantify the impact as expansion capital spending falls sharply.

The share price has been weaker of late, but Ingham Analytics say that until there is clarity on Lake Charles in the US, the market will continue to discount the stock.

You will also be interested to see the handy sensitivity table, indicating at what oil price and rand exchange rate Sasol's earnings per share shall be. They also signal what dividend they believe Sasol is able to afford without negatively affecting the balance sheet. Particularly interesting is the mention of the Carbon Tax, which came into effect from 1 June 2019. Ingham Analytics will address this complex topic specifically in a future research note but they have guided as to the depressive effect it will have on Sasol earnings. All this and more for a special promotional price of R49.

Click here to get the Ingham Analytics Sasol note with its usual insightful analysis.



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