Sasol an Energy and chemicals group has reported a 17% drop in earnings to R49.76/share in the year to June 30, 2015, with a solid operational performance offset by a sharp weakening in market conditions, including a year-on-year oil price decline of 33%.

The company’s departing CEO David Constable specified that the group expected oil prices to remain low until the end of the 2017 calendar year, with average Brent crude oil prices expected to remain between $50/bbl and $60/bbl in the 2016 financial year, adding that the company will freeze 1,000 job vacancies as it cuts costs.

He however, described the company as resilient after a far-reaching change programme, implemented since 2012, which had resulted in cost savings of R2.5-billion during 2015; ahead of the R1-billion target.

Additionally, the group’s response plan to the fall in oil prices recorded cash conservation benefits of R8.9-billion last year. The 30-month cash-conservation target, using December, 31, 2014 as the reference point, remained between R30-billion and R50-billion, with capital portfolio phasing and reductions expected to contribute between R13-billion and R22-billion. During the 2015 financial year, Sasol’s Southern African energy business increased liquid fuels sales volumes by 5% to 61.5-million bbl and volumes of 60-million bbl were being forecast for the current financial year.

“We expect an overall strong production performance for the 2016 financial year,” Constable told Engineering news in a statement, adding that the focus would be on volume growth, margin improvement, cost optimization and cash conservation.