Sasol slumps, operational challenges offset oil prices
CAPE TOWN - Shares of chemicals and energy group Sasol slumped on Tuesday, after it reported muted profit growth for its half-year to end December, when the beneficial effects of higher oil prices and a weaker Rand were offset by operational challenges.
Core headline earnings per share, the group’s preferred measure, which excludes non-recurring items, is expected to rise in a range of between two per cent and 12 per cent to end December, it said in an operating update. Adjusted earnings before interest, taxation, depreciation, amortisation (Ebitda) are expected to be in line with the prior half-year’s R31.8 billion.
In morning trade Sasol’s shares had fallen 7.95 per cent to R280.81, though they are still up four per cent so far in 2023. A higher oil price, refining margins and a weaker Rand benefitted the group, but this was offset by the impacts of weaker global economic growth, depressed chemicals prices and higher feedstock and energy costs.
Mining
“Our South African operations also experienced several operational challenges, most notably in the mining business, where coal productivity and quality have been below plan,” it said.
This was exacerbated by supply chain constraints related to poor rail performance, unavailability of port infrastructure impacting sales volumes, as well as power outages impacting our suppliers and customers.
Sasol Limited (JSE:SOL) is an international integrated chemicals and energy company that leverages technologies and the expertise of its 31 270 people working in 31 countries. Sasol develops and commercialises technologies, and builds and operates world-scale facilities to produce a range of high-value product stream, including liquid fuels, chemicals and low-carbon electricity. Sasol recognises the growing need for countries to secure supply of energy and chemicals. For many countries, specifically those with abundant hydrocarbons, in-country conversion of these resources into liquid fuels and chemicals goes a long way to boost national economies. Sasol’s focused and strong project pipeline means the company is actively capitalising on the growth opportunities that play to our strengths in Southern Africa and North America.
Investors
Sasol was established in 1950 in South Africa and it remains one of the country’s largest investors in capital projects, skills development and technological research and development. The company is listed on the JSE in South Africa and on the New York Stock Exchange in the United States.