Sasol’s coal export sales fell 25% in the six months to December 31, due to operational challenges at Transnet Freight Rail and the diversion of coal to the Secunda Operations (SO), the group said yesterday in a sales and production update.
However, it said group external sales revenue was only 2% lower, driven by lower sales volumes. First-half overall sales volumes were 5% lower, largely due to lower Eurasia volumes, offset by higher sales in America. The average basket price rose 3%, but decreased by 14% compared to the first quarter of the 2023 year, due to the weaker economic environment.
The share price nudged up 4.7% to R316.91 yesterday afternoon.
In Sasol’s mining operations, productivity fell in December, 2022 due to a lack of spare parts and safety stoppages.
The productivity forecast for the full 2023 financial year was lowered to 900 to 1 000 t/cm/s from the previously forecast range of 950 to 1 050 t/cm/s.
First-half productivity was 930 t/cm/s, 5% lower than in the first half of the previous financial year, due to safety and operational stoppages initiated by the regulator and employees.
In the fuels operations, first half production was 2% lower due to the planned total shutdown and unplanned outages, which included an unprecedented rainfall incident in November 2022 that caused a factory outage for several days.
“We are making good progress on improving the operational reliability and implementing measures to mitigate the impact of poor coal quality,” the group said.
Natref was impacted by an unplanned shutdown in July, 2022 from crude oil supply shortages but it anticipated producing in line with previous market guidance for 2023.
The sales volume outlook for the year remained in line with previous market guidance of 52 to 55 million barrels.
Chemicals Africa sales revenue from the South African assets was 2% higher driven by higher prices, and offset by lower volumes. Sales volumes were 2% lower mainly due to the SO shutdown compared to a phase shutdown in the prior year, and supply chain issues.
This was as a result of flood damage in KwaZulu-Natal and the force majeure declared on the local supply and export of certain chemical products.
“These force majeure declarations have largely been lifted except for the local supply of ammonia, which is still in place due to a shortage of Transnet rail cars,” the group said.
Chemicals America sales revenue was up 12% driven by higher volumes, offset by lower prices. Sales volumes were 18% higher, largely due to the planned ethylene cracker turnaround within the base chemicals division.
The Ziegler alcohol unit was operating at 50% utilisation while damaged sections were being repaired.
Performance Solutions saw strong volume performance from the Comonomers unit with a rolling 12-month production record in the second quarter.
The average sales basket price was 6% lower while the price was 21% lower, largely due to lower ethylene and polymer prices where inflationary pressure and weaker economic growth have negatively impacted base chemicals’ demand.
Chemicals Eurasia sales revenue fell 17% and by 6% after normalising for the third quarter divestiture of the European Wax business. The lower revenue was largely due to lower volumes offset by higher prices. Sales volumes were 33% lower partly due to the absence of wax volumes.
After normalising for the wax deal, first-half sales volumes fell 19%, largely due to reduced demand across most business divisions as a result of the war in Ukraine, Covid-19 in China, and a weakening in the economic outlook.
Sasol said it remained difficult to forecast the sales volumes for Chemicals Eurasia due to the uncertain macro-economic environment, but volumes were expected to be 2% lower, the group said.
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