Integrated energy and chemicals multinational Sasol's energy business had delivered a satisfactory performance, in line with expectations, for the financial year ended June 30.

The company on July 27 reported that its integrated value chain had benefitted from higher oil prices in the second half of the financial year, as well as strict cost control and disciplined capital expenditure plans.

That was offset, to some extent, by the Covid-19 impact on demand, coal quality and minor plant instabilities.

Sasol Mining's coal export sales increased and benefited from higher coal export prices.

Production, however, was impacted by geological challenges, which impacted the coal quality. The company is investigating potential solutions to improve the coal quality.

"To improve productivity sustainably going forward, we have implemented the Fulco integrated shift system across all Secunda mines, with the rollout to the last mine completed in June, two months earlier than planned.

"We expect our productivity to increase and result in lower external coal purchases in the 2022 financial year as we fully ramp up the Fulco integrated shift system," Sasol said.

In Mozambique, gas operations were stable despite several Covid-19 operational challenges. Production volumes were 2% higher than the prior year and within market guidance.

Natural gas sales volumes in South Africa were 16% higher than in the prior year owing to higher demand from resellers and customers as Covid-19 restrictions were eased.

Methane-rich gas sales volumes were 5% lower year-on-year owing to operational issues experienced by key customers.

"In line with our strategic objectives, we divested of our interest in the Gabon oil producing asset in February.

"In addition, the divestment of our interest in the Canadian Montney shale assets are far advanced," the company said.

Meanwhile, liquid fuel sales volumes were 3% higher year-on-year as a result of a strong recovery in demand and the easing of lockdown restrictions. The demand for diesel has recovered to above pre-Covid-19 levels, while petrol demand remains at between 90% to 95% of pre-Covid-19 levels.

Jet fuel demand remains constrained. The outlook on sales volumes is expected to be slightly depressed as a result of the third Covid-19 wave.

CHEMICALS
External chemical sales revenue for the financial year were 13% higher year-on-year, with the average sales basket price 17% higher year-on-year.

The higher prices were owing to a combination of improved demand, higher oil prices and reduced market supply resulting from weather-related events in the US and global supply chain challenges as a result of the Covid-19 pandemic.

Despite adverse weather events in the US and South Africa impacting on production, the previously reported divestment of the US Base Chemical assets in the second quarter of the reporting year and the continued impact of the Covid-19 pandemic, total chemical sales volumes for the financial year were only 3% lower year-on-year and largely in line with previous market guidance.

Sales volumes in Chemicals America were 37% higher in the fourth quarter compared to the previous quarter as the ethylene crackers produced close to nameplate capacity.