Sasol shares sink after warning on Secunda challenges (updated)

Sasol

01/12/2022 13:15

(Recasts with shares)
       Dec 1 (Reuters) - Sasol  SOLJ.J  shares fell nearly 7%
after the South African petrochemicals company said it expects
challenges at its Secunda operations to impact coal and fuel
production, although higher crude oil prices are seen boosting
half-year profit by more than 20%.
    Sasol shares were 6.74% lower at 1301 GMT. 
    The world's biggest producer of fuel products from coal and
chemicals manufacturer said headline earnings per share (HEPS) -
the main profit measure in South Africa - could be up more than
20% in its half-year to Dec. 31 despite operational challenges
at Secunda.
    "We continue to see the favourable impact of the higher
Brent crude oil price, refining margins and weaker rand-U.S.
dollar exchange rate on our gross margins," Sasol said in a
trading statement.
    Sasol said the challenges related to coal quality, safety
stoppages and flooding at Secunda, which have hit production and
sales volume performance in the current quarter.
    As a result, the company has lowered its Secunda coal
production guidance for the full-year to June 2023 to 6.6-6.9
million tonnes, from previous guidance of 7-7.2 million tonnes.
Liquid fuels sales volumes are now expected at 52-55 million
barrels, down from initial guidance of 53-56 million barrels.
    Chemicals sales in Africa are also expected to be affected
by lower production at Secunda.
    Sasol said the force majeure declared in October on the
local supply and export of certain chemicals products because of
a wage strike at logistics company Transnet had been largely
lifted in early November. However, Sasol declared another force
majeure in November, this time on local ammonia supply, because
of a shortage of rail cars.
    Sasol is due to report half-year results on Feb. 21. 
 (Reporting by Nelson Banya; Editing by David Goodman and
Bernadette Baum)
 ((Nelson.Banya@thomsonreuters.com;))