Sasol shares sink after warning on Secunda challenges

Sasol shares fell almost 7% after the South African petrochemicals firm stated it expects challenges at its Secunda operations to influence coal and gas manufacturing, though larger crude oil costs are seen boosting half-year revenue by greater than 20%.

Sasol shares have been 6.74% decrease at 1301 GMT.

The world’s largest producer of gas merchandise from coal and chemical substances producer stated headline earnings per share (HEPS) – the primary revenue measure in South Africa – might be up greater than 20% in its half-year to Dec. 31 regardless of operational challenges at Secunda.

“We proceed to see the beneficial influence of the upper Brent crude oil worth, refining margins and weaker rand:greenback trade fee on our gross margins,” Sasol stated in a buying and selling assertion.

Sasol stated the challenges associated to coal high quality, security stoppages and flooding at Secunda, which have hit manufacturing and gross sales quantity efficiency within the present quarter.

Because of this, the corporate has lowered its Secunda coal manufacturing steerage for the full-year to June 2023 to six.6-million to six.9-million tonnes, from earlier steerage of 7-million to 7.2-million tonnes. Liquid fuels gross sales volumes are actually anticipated at 52-million to 55-million barrels, down from preliminary steerage of 53-million to 56-million barrels.

Chemical compounds gross sales in Africa are additionally anticipated to be affected by decrease manufacturing at Secunda.

Sasol stated the drive majeure declared in October on the native provide and export of sure chemical substances merchandise due to a wage strike at logistics firm Transnet had been largely lifted in early November. Nonetheless, Sasol declared one other drive majeure in November, this time on native ammonia provide, due to a scarcity of rail automobiles.

Sasol is because of report half-year outcomes on Feb. 21.

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