Tags: Sasol | tech | global | SSL

Sasol: High Tech Global Energy Production

By    |   Tuesday, 03 January 2012 05:16 PM

Sasol Limited (SSL) provides investors with a unique approach to investing in the energy sector. The company has built advanced technology energy processing facilities and is involved in global energy production.

Sasol is a South African energy company with interests in coal mining, natural gas production and crude oil drilling. Production sites range from South Africa to Canada to Australia. Sasol then takes energy production to another level with the facilities and processes for the production of gas-to-liquid (GTL) and coal-to-liquid (CTL) synthetic fuels.

The company is a world leader in GTL and CTL production. Upstream production of coal, oil and gas is either sold on the open markets or used a feedstock for Sasol's synthetic fuels production. The final leg of the company's revenue sources is chemical production and sales.

The Sasol fiscal year ends on June 30 and the company makes financial reports on the half year. For fiscal year 2011, which ended in June, revenue for the year increased by 17 percent over the 2010 results. Earnings per share increased by 27 percent year-over-year.

Along with the increased earnings the company increased the dividend in 2011 by 24 percent. Sasol pays an interim and final dividend each year. In 2011, investors holding the SSL ADR shares earned a total of $1.69 per share. The dividend amounts in 2010 and 2009 were $1.48 and $1.08, respectively.

Canada acquisition

In June 2011, Sasol Limited closed a deal for 50 percent ownership of the Montney gas basin assets of Talisman Energy (TLM) for approximately $1 billion. Plans for the shale gas production site include the construction of a GTL plant, which would have a capacity of 50,000 or 100,000 barrels per day of synthetic fuels. A GTL plant has the potential to turn low value natural gas production into high value synthetic fuels.

Thirteen securities analysts from various global financial centers follow Sasol, and nine of the 13 rate the company at outperform or buy. The consensus earnings estimate for 2012 of $5.58 per share compared reported net income of $4.12 earned in fiscal 2011.

The company next reports on March 5.

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Tuesday, 03 January 2012 05:16 PM
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