Chemicals and energy group Sasol says improved operations and demand helped it beat its guidance for liquid fuel sales in its 2022 year, but it has recently seen some tapering off in demand amid record prices at the pump.
In a production update for its year to end-June, the group said it sold 55.2-million barrels of liquid fuels, having guided as much as 54-million, also benefiting from improved performance at its Secunda operation during its second half.
Secunda had been hit by coal availability issues, including wet weather that disrupted supplies and mining accidents at Sasol's own operations, but the group said on Monday it has now built up its stockpile to above market guidance of as much as 1.5-million tonnes.
Secunda's output was down 10% for the year, while external purchases jumped 84% — or 3.2-million barrels — with the group also recently grappling with flooding in KwaZulu-Natal and a shutdown of the Natref refinery due to delayed shipments of crude oil.
Earlier in July SA's largest fuel producer had declared force majeure — which allows a company to suspend its contractual obligations if it cannot deliver on these due to circumstances beyond its control — but Sasol said it remains on track for a start-up by month’s end.
“We currently have plans in place to maintain supply to customers and minimise any potential disruptions,” it said.
In its chemicals business, external sales volumes fell 12%, but revenue picked up 22%, with the group benefiting from a 39% rise in average sales prices.
Sasol said on Monday it expects further pricing and demand volatility, arising from continued geopolitical instability, excess inventories from China, supply chain disruptions, and potential shutdowns related to threatened Russian energy supply.
Higher inflation and interest rates will continue to affect consumers, leading to potential demand contraction, it said.
By the JSE’s close Sasol’s share price was up 0.56% to R348.60. It is up more than 34% so far this year.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.