Global integrated chemicals and energy company Sasol said on Monday its headline earnings for the six months ended December jumped 32% to R23.25 per share and it expected an improved operational performance for the year to June.
The company recorded a satisfactory operational and financial performance against the backdrop of a volatile macroeconomic environment and an uncertain geopolitical climate which impacted global demand growth, said joint president and chief executive officer Bongani Nqwababa.
“Our production and sales performance was mixed with largely lower than expected production in the first half of the financial year, mainly as a result of the longer than planned total shutdown at our Secunda Synfuels Operations,” he said.
“However, our operational performance was enhanced by management interventions in previous periods resulting in improved performances at Natref and Sasol Mining. Post the shutdowns, we are pleased to see steady progress across our value chains.”
Sasol acknowledged the disappointing cost and schedule overrun of its Lake Charles Chemicals Project, which it said was impacted by several challenges in the fourth quarter of the previous calendar year.
CEO Stephen Cornell said, “Despite incremental cash flows from the project being deferred due to a schedule delay, we remain confident that the project will deliver the steady EBITDA (earnings before interest, taxes, depreciation, and amortisation) run-rate of US$1.3 billion in financial year 2022.
“While this update will have an impact on our cash flow inflection point and gearing, we continue to proactively protect our balance sheet, while managing the capital structure and gearing during these turbulent times.”
Sasol said oil price and foreign exchange movements outside its control may impact its results, but the company’s focus remained firmly on managing volume growth, cost optimisation, effective capital allocation, focused financial risk management, and maintaining an investment grade credit rating.
It expected an overall improved operational performance for the year to June, with Secunda maintaining post-shutdown run-rates, targeting the upper-end of 7.5 to 7.6 million tons and liquid fuels sales volumes of approximately 57 to 58 million barrels in line its previous market guidance.
It also expected base chemicals sales volumes, excluding US produced products, to be 1% lower for the financial year and performance chemicals annual sales volumes to be one to 2% higher. –ANA