Sasol profit to rise more than 20%

Chemicals and energy group Sasol said on Thursday its first-half headline profit is to rise more than 20% year on year, boosted by higher international oil prices and a weaker rand. But it added that its SA operations were blighted by challenges in October and November.

Chemicals and energy group Sasol said on Thursday its firsthalf headline profit is to rise more than 20% year on year, boosted by higher international oil prices and a weaker rand.

But it added that its SA operations were blighted by operational challenges in October and November ranging from coal quality to flooding that affected coal processing plants, loadshedding as well as unplanned safety stoppages.

The factors collectively affected production and sales volume performance during the second quarter of the financial year, as well as the outlook for remainder of the financial year.

Lower production from Secunda has a direct effect on the downstream chemicals value chains in SA.

Sasol’s force majeure on the local supply and export of certain chemicals products was largely lifted at the beginning of November with the end of the Transnet strike in October.

“Unfortunately, a shortage of rail cars resulted in the declaration of force majeure on the local supply of ammonia again in November 2022,” Sasol said in a statement.

As a result of the operational challenges in the SA value chain, Secunda operations production volumes will be between 6.6million and 6.9-million tonnes, lower than previous guidance of between 7.0-million and 7.2million tonnes.

Liquid fuels sales volumes will be 52-million to 55-million barrels, lower than previous guidance of 53-million to 56million barrels. Mining productivity will also be lower.

But Sasol said it is taking steps to improve productivity and coal quality at its mining business.

“We are enhancing our coal blending through more focused purchases of higher quality coal from external suppliers to supplement our own production,” the company said.

“Given the heightened risk associated with the rainy season in SA, we have taken proactive measures at our Secunda site to reduce the risk of flooding.”

Sasol said operations at its international businesses continue to deliver steady performance despite challenging macroeconomic conditions.