Sasol (SOL) is a massive international chemicals and energy company with roots in the oil-from-coal technology developed during the apartheid era in South Africa. About 50% of the company's profits are directly linked to the oil price. It has two main growth areas: its 50% stake in an ethane cracker plant in Louisiana, America, known as the "Lake Charles Chemical Project" (LCCP), and its development of gas resources in Mozambique. Sasol was awarded two new licenses in Mozambique to explore for gas in an onshore development of approximately three thousand square kilometers, which could significantly add to its existing gas projects in the Rovuma province.
One area of concern for Sasol is that it is the biggest producer of greenhouse gases in South Africa and on the JSE. It is listed as one of the 100 fossil-fuel companies worldwide that contribute to more than 70% of greenhouse gases. The company remains under international pressure to address its carbon emissions effectively. After the impact of COVID-19, the share made a dramatic recovery, which was brought to an end by the decline in commodity prices, especially oil.
On 7th April 2024, the company announced that the Minister of the Environment, Barbara Creecy, had upheld its appeal against a decision by the national air quality officer that might have put the continued activity at its Secunda oil-from-coal plant at risk. Sasol operates six coal mines, which deliver 10 million tonnes of thermal coal feedstock to its operations at Secunda and Sasolburg, as well as for the export market.
In its results for the year to 30th June 2024, the company reported a headline earnings per share (HEPS) decline of 66% and a 16% drop in its net asset value (NAV). This was mainly due to the R58,9 billion impairment of the Chemicals America Ethane value chain, a R5,3 billion impairment of Chemicals Africa, and a R7,8 billion impairment of Secunda. The company stated, "The business benefitted from a weaker R/US$ average exchange rate and a favorable rand oil price; however, constrained margins impacted negatively on our fuels and chemicals businesses. The financial results were further impacted by various operational challenges across the business."
Sasol remains a volatile commodity share in a long-term downward trend. We suggest waiting until it breaks up through its downward trendline before investigating further.
One area of concern for Sasol is that it is the biggest producer of greenhouse gases in South Africa and on the JSE. It is listed as one of the 100 fossil-fuel companies worldwide that contribute to more than 70% of greenhouse gases. The company remains under international pressure to address its carbon emissions effectively. After the impact of COVID-19, the share made a dramatic recovery, which was brought to an end by the decline in commodity prices, especially oil.
On 7th April 2024, the company announced that the Minister of the Environment, Barbara Creecy, had upheld its appeal against a decision by the national air quality officer that might have put the continued activity at its Secunda oil-from-coal plant at risk. Sasol operates six coal mines, which deliver 10 million tonnes of thermal coal feedstock to its operations at Secunda and Sasolburg, as well as for the export market.
In its results for the year to 30th June 2024, the company reported a headline earnings per share (HEPS) decline of 66% and a 16% drop in its net asset value (NAV). This was mainly due to the R58,9 billion impairment of the Chemicals America Ethane value chain, a R5,3 billion impairment of Chemicals Africa, and a R7,8 billion impairment of Secunda. The company stated, "The business benefitted from a weaker R/US$ average exchange rate and a favorable rand oil price; however, constrained margins impacted negatively on our fuels and chemicals businesses. The financial results were further impacted by various operational challenges across the business."
Sasol remains a volatile commodity share in a long-term downward trend. We suggest waiting until it breaks up through its downward trendline before investigating further.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.