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Sasol’s First-Half Performance Impacted by Macroeconomic Volatility


Sasol, the South African chemicals-and-energy group, has reported that its first-half performance was negatively affected by a volatile macroeconomic environment. Despite this, the company remains confident in its prior guidance, even though it foresees continued pricing and demand volatility.

During the six months ended December 31, Sasol faced challenges such as weaker oil and petrochemical prices, unstable product demand, and ongoing inflationary pressure. The pricing pressure has had a significant impact on sales volumes, margins, and overall profitability.

Although the company improved its production rate, saleable mining production decreased by 1% compared to the previous year, amounting to 15.1 million metric tons. Sasol attributes this decline to safety-related incidents and operational challenges.

In contrast, Mozambique gas production experienced a 10% growth, reaching 60.5 billion square cubic feet. Additionally, the production volumes from Sasol’s Secunda Operations under the Fuels unit increased by 8% to 3.50 million tons.

While total chemicals external sales volumes rose by 4% to 3.16 million tons, the revenue dropped by 21% to $3.78 billion. This decrease is primarily due to a 24% decline in the average sales basket price.

Looking ahead, Sasol expects pricing and demand volatility to persist during the second half of the year. The company acknowledges the uncertainty in global market sentiment and petrochemical markets.

Despite these challenges, Sasol is optimistic about meeting most of its prior guidance for fiscal year 2024 in terms of production and sales volumes.

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