- Sasol (SSL, Financial) faces ongoing margin pressures due to global economic challenges and operational disruptions.
- The company has revised its mining production outlook to 28-30 million tons for FY25.
- Capital expenditure is projected at the lower end of the R28-R30 billion range, with costs managed below inflation.
Sasol Limited (SSL) has reported its production and sales metrics for the nine months ended March 31, 2025, highlighting significant margin pressures amid global macro-economic challenges. The company's Southern Africa operations are dealing with coal quality issues at Secunda Operations, resulting in a strategic reduction in coal production by approximately 2 million tons, with a shift towards higher quality purchased coal. The ongoing destoning project, aimed to enhance coal quality, remains on track for completion in H1 FY26, with costs below R1 billion.
Production disruptions were noted due to a fire incident at Natref and an unplanned outage at Secunda Operations in Q3 FY25, impacting production volumes. However, despite operational outages in America, the International Chemicals segment saw revenue growth in Q3 FY25 due to higher average prices.
Sasol completed its exit from the US Phenolics business in March 2025, in line with its strategy to optimize its asset portfolio and improve margins. The company also successfully renewed atmospheric emissions licenses for key operations, which supports its operational continuity.
The financial guidance for FY25 remains largely unchanged, with cash fixed costs expected to stay below inflation, and capital expenditure forecasted at the lower end of the R28-R30 billion range. The mining production outlook has been adjusted to 28-30 million tons, with costs estimated between R650-R670 per ton. Moreover, Sasol's hedging program continues to provide downside protection, securing Brent crude oil floor prices of approximately $64/bbl for Q4 FY25 and $60/bbl for FY26.
Sasol's operational and financial strategies indicate a focus on maintaining financial stability while navigating external challenges. With the ongoing measures and strategic adjustments, Sasol aims to mitigate the impacts of a challenging business environment.
