Thursday, February 22, 2024

South Africa: Sasol reports lower profits

Sasol South Africa recently released a trading update pointing to a decline in its financial results for the six months ending December 31, 2023. The company attributed the decline to a number of factors, including a volatile macroeconomic environment with depressed oil and petrochemical prices, unstable demand for products and continued inflationary pressure on costs.

Although there have been operational improvements in South Africa, Sasol highlighted the persistent poor performance of state-owned companies involved in its value chain, along with weaker global growth prospects, as factors that continue to negatively impact its business performance.

The company expects adjusted net profit for the six months to be between R26.2 billion and R29.4 billion, a significant decrease compared to the second half of 2022. In addition, earnings per share and headline earnings per share are expected to decrease by between 29% and 43% and between 28% and 42% respectively.

Sasol also recorded notable non-cash adjustments, including a net loss of R5.8 billion. This loss was mainly attributed to an impairment of R3.9 billion at its Secunda liquid fuels refinery, due to higher electricity costs and lower oil prices. In addition, the company recorded an impairment of R1.1 billion at its Chlor-Alkali and PVC and Polyethylene units at Chemicals Africa, due to lower demand for these products.

The release of the 2024 interim financial results is scheduled for Monday, February 26, 2024.


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