JOHANNESBURG, Feb. 8, 2013 /PRNewswire/ -- Shareholders are advised that Sasol's (JSE - SOL; NYSE - SSL) headline earnings per share (HEPS) for the six months ended 31 December 2012 are expected to increase by between 0% and 5%, and earnings per share (EPS) for the six months ended 31 December 2012 are expected to decrease by between 10% and 20%, compared to the prior comparable period. The decline in the earnings per share is due to the impairment of our share of the investment in Arya Sasol Polymers Company (ASPC), which is detailed further below.
Although Sasol's profitability for the 2013 financial year to date benefited from the improved production performance of its foundation businesses, as well as the effect of an 11% weakening of the average rand/US dollar exchange rate, this has been largely offset by a softening in the average Brent crude oil price, depressed chemical prices and a product margin squeeze that negatively impacted our chemical businesses. In addition, cost inflation was compounded by the weaker rand as well as higher labour and maintenance costs.
We continue to actively engage with interested parties to divest from our share in ASPC. During the current reporting period, the investment was impaired by R1 974 million based on our assessment of the fair value of the asset, which takes into account the uncertainty associated with the Iranian environment in which we operate. In terms of International Financial Reporting Standards (IFRS), further losses relating to the foreign currency translation reserve of approximately US$100 million may be recognised in income once we finally divest from ASPC. There may be further potential impairments linked to the fair value of the asset as a result of a deteriorating Iranian environment and the accounting requirement to continue recognising operating profits, which might not be recuperated through the divestiture. Despite a solid operational performance by ASPC, results for the six month reporting period have been negatively impacted by the devaluation of the Iranian currency, which resulted in translation losses of approximately R1 015 million being recognised in the income statement.
Our financial results for the six months ended 31 December 2012 may be further affected by any adjustments resulting from our half-year end closure process. This may result in a change in the estimated earnings.This trading statement only deals with the comparison to the first half of the 2012 financial year. The lower earnings base of the second half of the 2012 financial year, which included significant once-off charges and reporting period end adjustments, will strongly influence a comparison of the full 2013 financial year results with 2012. Guidance will be provided on the full 2013 financial year results when there is a reasonable degree of certainty in this regard.