Sasol management expects sales volumes for its Fuels and Chemicals Africa divisions to be largely in line with 2024 in spite of challenges, including a fire at the oil refinery and political unrest in Mozambique.
The oil-from-coal and chemical group said in a trading statement for the six months to December 31 on Thursday that the civil unrest in Mozambique affected its Gas Central Processing Facility (CPF), leading to reduced production rates in December.
However, the situation at the CPF had since then improved, and the unit is operating at full capacity, albeit with heightened near-term risk still prevalent.
On January 4, 2025, a fire occurred at the Natref refinery that damaged supporting piping and infrastructure around the Crude Distillation Unit.
“Our team responded swiftly to contain the fire, with no reported injuries. Repairs are anticipated to be completed before the end of February 2025, and plans are being implemented, including product purchases to address supply shortfalls, where possible,” the group’s management said.
In December, the group decided on a destoning solution to enhance coal quality supplied to Secunda Operations (SO) - the benefits of this were expected in the first half of the 2026 financial year, which was earlier than previously communicated.
During the six-month period, operational challenges were experienced at SO largely related to ongoing coal quality complications and the impact of this on gasifier and equipment availability.
“The implementation of destoning and ongoing equipment reliability improvement initiatives are expected to improve production levels going forward,” the group said.
Meanwhile, International Chemicals revenue improved compared to the first half of the 2024 financial year, though the business environment remained challenging.
Sales volumes continued to be negatively impacted by the East Cracker outage in the US. However, the unit started up successfully in November 2024. Overall profitability had improved due to proactive management initiatives.
“Market guidance for both Mining and Gas remains unchanged, with the annual volume outlook for SO and Natref revised downward due to the aforementioned challenges. Despite the operational challenges faced during the quarter, we remain committed to executing key self-help initiatives aimed at improving performance and mitigating the challenges we face.
ORYX production volume guidance was revised upwards. Sales volume guidance for International Chemicals has been adjusted downward to 4 - 8% lower than the 2024 financial year, driven by weaker-than-expected demand and unplanned operational outages. However, the financial impact was mitigated through cost management initiatives and improved margins.
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