Petrochemicals giant Sasol says its results and performance for the first half of the 2024 financial year – the six months to December 31 – continued to be impacted on by a volatile macroeconomic environment, including weak oil and petrochemical prices, unstable product demand and inflationary pressure.

The company also remains concerned about the underperformance of State-owned entities in South Africa, as well as the weaker global growth outlook.

Sasol, nonetheless, reported an improved performance in the energy business, compared with the first half of the prior financial year, including higher production, improved equipment availability and operational stability at the Secunda Operations.

The group posted refined product output of 1.68-million tons in the first six months of the reporting year from the Secunda Operations.

Sasol also reported improvements across its mining operations, partly owing to “full potential programme” rollouts at the Shondoni and Thubelisa collieries.

Sasol produced 15.1-million tons of saleable coal in the period under review.

There were, however, some unplanned engineering downtime and safety-related incidents recorded, with Sasol having reported four fatalities in the period under review.

The chemicals business faced challenging market conditions especially in China and Europe. The average sales basket price for the first half of the year was 24% lower compared with the first half of last year, with the decrease driven by a combination of lower oil, feedstock and energy prices globally.

Sasol confirms that its profitability and margins remain under pressure owing to these factors.

Sasol sold 3.1-million tons of chemicals in the period under review, at an average sales basket price of $1 194/t, compared with an average sales basket price of $1 571/t in the prior corresponding period.

The company is managing its production proactively in response to lower demand and to manage inventory levels, while strict cost and capital management measures also continue to be implemented.

Despite the market headwinds, Sasol’s total chemical sales volumes were 4% higher year-on-year, largely owing to higher ethylene and polyethylene sales in America, improved production and improved supply chain performance in Africa, which helped to offset lower demand in Europe and Asia.

The company says its South African suppliers and customers continue to face business disruptions owing to challenges at Eskom and Transnet.

Sasol expects pricing and demand volatility to continue through the second half of the year, with global market sentiment remaining uncertain; however, its production and sales guidance for the full year remains unchanged.