Sasol Stock Price, News & Analysis

Sasol has sold its German subsidiary, Sasol Wax GmbH, to AWAX s.p.a., a global leader in wax production, effective March 1, 2022. This sale aligns with Sasol's strategy to streamline its portfolio by focusing on core assets. Notably, the South African Fischer-Tropsch hard wax business will remain with Sasol. AWAX aims to leverage Sasol Wax's advanced hydrogenation facility to enhance its technological leadership in the wax market. The transaction reflects Sasol's commitment to repositioning itself within the energy and chemical sectors.

Sasol Limited reported its interim results for the six months ending December 31, 2021, showcasing a 12% increase in EBIT to R24.3 billion. This growth was driven by higher crude oil and chemicals prices despite operational challenges at Secunda Operations. Notably, total assets rose 9% to R394.2 billion, while total liabilities reached R221.6 billion, representing a 6% increase. However, headline earnings fell 20% to R9.5 billion. The company opted not to declare an interim dividend amidst macroeconomic uncertainties. Management changes were announced in the mining and energy sectors.

Sasol is anticipating a mixed financial performance for the half-year ending December 31, 2021, mainly due to better Brent crude oil prices and refining margins. Adjusted EBITDA is projected to rise by 66% to 76%, reaching between R30.9 billion and R32.7 billion. However, lower sales volumes for chemicals and energy have partially offset these gains. Earnings per share are expected to range between R22.81 and R25.15, with headline earnings per share decreasing by 16% to 26%. Notable non-cash adjustments include unrealised losses of R4.9 billion on financial instruments.

Sasol has released production and sales performance metrics for the six months ending December 30, 2021. The report is available on its website under the Investor Centre section. Sasol highlights the potential impacts of COVID-19 on its operations and emphasizes forward-looking statements regarding business strategies, capital investments, and sustainability efforts. The company is focusing on mitigating risks, optimizing operations, and pursuing low-carbon initiatives. Investors are encouraged to review the full report for comprehensive details on performance metrics.

Sasol Limited has revised its Secunda Operations (SO) forecast production volumes for financial year 2022 to 6.7–6.8 million tons, down from previous estimates due to operational challenges. Factors include delays during a September shutdown, power supply interruptions, and safety incidents, leading to over 1 million tons of lost production. Despite improving gasifier and boiler availability, coal stockpile levels have dropped below targets, prompting coal purchases on the open market. Sasol aims to restore production levels and improve coal quality in the coming months.

Sasol is leading a feasibility study for the Boegoebaai green hydrogen project, which has been designated a Strategic Integrated Project in South Africa's National Development Plan. The study, expected to take 24 months, aims to explore Boegoebaai's potential as an export hub for green hydrogen and ammonia. Sasol has partnered with the Northern Cape Development Agency and received joint funding from the Industrial Development Corporation. The project aligns with South Africa's goal to become a global green hydrogen player, promising sustainable job creation and infrastructure investment.

Sasol Limited has announced a commitment to achieve net zero emissions by 2050, enhancing its 2030 GHG emission reduction target from 10% to 30% for its Energy and Chemicals businesses. This update aims for direct decarbonisation without divestments or offsets. The company plans to invest R20 to R25 billion annually to meet its transition goals, targeting a return on invested capital (ROIC) between 12% and 15% by 2025. Additionally, dividends will resume once debt metrics stabilize, supporting shareholder returns while pursuing sustainability.

Sasol has published its integrated report for the year ending June 30, 2021, which is available on its website. The annual financial statements received an unmodified opinion from PricewaterhouseCoopers and were previously published on August 16, 2021. Additionally, Sasol will file its annual report on Form 20-F with the SEC on September 22, 2021. A virtual Capital Markets Day is scheduled for the same day to discuss the company's long-term strategy. The Annual General Meeting will be held electronically on November 19, 2021.