SacOil to Swing to Net Profit on Currency Gain, Restructuring

By Alex MacDonald

LONDON--South African oil and gas company SacOil Holdings Ltd.(SCL.JO) forecasts a swing to fiscal-year net profit, benefiting from foreign-exchange gains and the restructuing of its stake in a Congolese oil exploration project, in its latest trading update.

The dual Johannesburg- and London-listed firm is required to provide an update when it expects its earnings to rise or fall by more than 20%.

The company said Tuesday that it expects earnings a share rose to between 1.23 South African rand cents (0.078 U.S. dollar cents) and 2.05 cents in the year to Feb. 29, a turnaround from a loss of 8.54 cents a share in the previous fiscal year.

Basic headline earnings share, which excludes the impact of any re-measurements of assets or liabilities, is forecast to have risen to between 0.57 cents and 1.51 cents a share compared with a headline loss of 4.67 cents a share the previous year.

The depreciation of the South African rand against the dollar resulted in a foreign-exchange gain of ZAR154.6 million, SacOil said. The company also benefited from the reorganization of its holding in Block III int the Congo, which resulted in a ZAR103.6 million gain.

This helped offset a ZAR26.1 million impairment on a deferred receivable related to Block III as a result of civil unrest in the country. The project operator, French oil major Total SA (TOT), has since begun survey activites at the block, which has led SacOil to determine there will be no the further deferrals of forecast receivables.

The company also plans to write down the value of it stake in second phase of the Lagia oil field in Egypt by ZAR76.5 million because of low oil prices.

-Write to Alex MacDonald at [e-mail]

(END) Dow Jones Newswires

May 31, 2016 03:04 ET (07:04 GMT)

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