Sasol Ltd.’s margins from a strong oil price — that boosts the value of its fuel and chemical products — were diluted by operational disruptions including power outages and rail logistics in South Africa.
(Bloomberg) — Sasol Ltd.’s margins from a strong oil price — that boosts the value of its fuel and chemical products — were diluted by operational disruptions including power outages and rail logistics in South Africa.
The company has struggled with the quality of the coal it mines and uses as a feedstock, while international units have experienced volatility in pricing and demand that’s expected to continue for the rest of the year, it said in first-half results. Higher oil prices in the six months through December allowed Sasol to declare its first interim dividend since 2020.
“We remain focused on factors within our control, which include improving productivity and addressing coal quality at our mining operations, remaining agile and managing production rates to match market demand as well as maintaining our cost and capital discipline,” the company said.
Electricity rationing by South Africa’s state-owned utility Eskom Holdings SOC Ltd., as well as delays to service by rail operator Transnet SOC Ltd., added to challenges during the period. Sasol said the ongoing uncertainties affected the accuracy of its forecasts.
The company aims to reduce emissions by at least 30% by the end of this decade from 2017 levels. It is South Africa’s second-biggest producer of greenhouse gases, and coal and other fossil fuels still make up the major part of its operations.
Renewable Agreements
Agreements have been signed for 550 megawatts of renewable energy in an effort to decarbonize operations, nearly half of a target to procure 1,200 megawatts of green energy by 2030.
Sasol has also launched a new venture capital fund to make investments in start-up companies developing technologies for sustainable chemicals and energy. That would “complement our internal research and technology capabilities to pursue compelling new options” toward a net zero goal in 2050, it said. It didn’t include details on the amount of funding.
Programs to produce green hydrogen and sustainable aviation fuel were declared strategic integrated projects by the government in December, which allows a quicker turnaround time, it said.
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