Sasol’s half-year headline profit to rise by 20+%
The energy group was boosted by higher international oil prices and a weaker rand, however its SA operations were blighted by operational challenges in late 2022
Chemicals and energy group Sasol said on Thursday its first-half headline profit would rise by more than 20% year on year, boosted higher international oil prices and weaker rand.
But its SA operations were blighted by operational challenges in October and November ranging from coal quality to flooding that affected coal processing plants, loading-shedding as well unplanned safety stoppages.
The factors collectively affected production and sales volume performance during the second quarter of the financial year, as well the outlook for remainder of the financial year.
The impact of lower production from Secunda has a direct impact 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 action 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 result of the operational challenges within the SA value chain, Secunda operations production volumes will be between 6.6-million and 6.9-million tonnes, lower than previous guidance of 7.0-million to 7.2-million tonnes.
Liquid fuels sales volumes will be 52-million to 55-million barrels, lower than previous guidance of 53-million to 56-million barrels. Mining productivity will also be lower.
But Sasol said it was 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,” it 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.”
The company said operations in its international businesses continue to deliver steady performance despite challenging macroeconomic conditions.