Sasol delivered a mixed set of results for the first six months of the 2023 financial year, supported by oil and refining tailwinds offset by lower volumes and higher feedstock costs.

• No loss of life since October 2021
• ~550MW renewable energy power purchase agreements conclude in South Africa
• R18 billion spend with black-owned suppliers
• Invested R780 million in socio-economic and skills development
• Venture Capital Fund launched supporting low carbon strategy
• Earnings before interest and tax (EBIT) of R24,2 billion
• Core headline earnings per share up 9% to R24,55
• Interim dividend of R7,00 per share declared

The impact from the global weaker economic growth, disrupted supply chains, depressed chemical prices and the resultant higher input costs impacted the Chemicals business negatively. Performance of our South African value chain was muted given the scheduled total East factory shutdown at Secunda and operational variability experienced, mainly due to lower productivity and coal quality in our Mining operations, contributing to lower volumes for the six months. The safety of our people and stability of our operations is a key priority. The company will continue to focus efforts on improving business performance to maximise profitability for the full year.

“We navigated several challenges during the period, including safety and operational stoppages at our Mining operations, power supply interruptions which also impacted our suppliers and customers, weaker global economic growth, disrupted supply chains and higher
feedstock and energy costs. The last two factors had a particularly severe impact on the profitability of the Chemicals Eurasia and Chemicals America segments,”

said Fleetwood Grobler, President and Chief Executive Officer, Sasol Limited.

Earnings before interest and tax (EBIT) of R24,2 billion remained in line with the prior period, mainly due to a strong pricing environment which was offset by lower volumes and increasing input cost pressures, with declining demand for chemicals globally. Earnings benefitted from gains of R5,1 billion on the valuation of financial instruments and derivative contracts offset by remeasurement items of R6,4 billion.

Remeasurement items include impairments of our Secunda liquid fuels refinery cash generating unit (CGU) (R8,1 billion), South African Wax CGU (R0,9 billion) and China Essential Care Chemicals CGU (R0,9 billion) and a reversal of impairment of our Tetramerization CGU (R3,6 billion) in the United States of America, as well as a profit on partial disposal of an interest in the Area A5-A offshore exploration license in Mozambique (R266 million) and the realisation of foreign currency translation reserves following the liquidation of subsidiaries (R251 million).

“I am excited about the progress we have made towards achieving our 30% greenhouse gas emission reduction target. We have concluded power purchase agreements (PPAs) for the purchase of a significant quantity of renewable energy in South Africa totalling approximately 550 MW. In Mozambique, our gas drilling campaign is progressing ahead of plan, providing us with increased feedstock flexibility up to 2030. Our Sasol ecoFT business is also making good progress, and we have entered into several studies to determine the feasibility of producing sustainable aviation fuel (SAF) from green hydrogen and sustainable carbon sources,” concluded Grobler.

Note: this article was sponsored and written by Sasol