JOHANNESBURG (Reuters) – South Africa’s Sasol on Tuesday forecast a drop of almost 10% in fuel production from its earlier outlook and a fall of up to 8% in chemicals output for the year to end-June 2022.
Sasol, the world’s top manufacturer of motor fuel from coal had faced increasing coal shortages due to supply and quality issues, while one of its refineries was hit by a power outage which had an impact on production.
The company said in a statement that while it had revised its outlook lower for the full year, the forecast could change further based on how the market evolves.
“Continued energy price volatility, increased geo-political tension in Europe and the impacts of the ongoing COVID-19 pandemic fuelled by the Omicron variant, may influence volumes and prices during the remainder of FY22,” it said.
Sasol was on the brink of bankruptcy in March 2020, but has since turned its fortunes around, helped by the sale of some non-core assets and a rise in crude oil prices.
It has been one of the best performers on the Johannesburg Stock Exchange, with its share price rewarding investors with a gain of more than 1,200% in the last two years.
Sasol expects its chemicals business, which contributes up to 60% to its overall revenue, to rise 31% to $4.86 billion for the six months to Dec. 31, despite a 12% drop in volumes as it benefited from an increase in demand and prices of chemicals.
Chemicals output from its Secunda operations, located south of Johannesburg, was hit by a plant shutdown and tight supplies of coal. Its other refinery, Natref, will also produce less due to a power outage, the company said, adding violent protests in parts of South Africa in July had also impacted operations.
Sasol will publish its interim financial results on Feb 21.
(Reporting by Nelson Banya; Editing by Promit Mukherjee and Alexander Smith)
