Energy and chemicals company Sasol has attributed its “underwhelming” upcoming financial results for the six months ended December 31, 2023, to continued volatility in the macroeconomic environment, with weaker oil and petrochemical prices, unstable product demand and ongoing inflationary cost pressure.

Despite some operational improvements in South Africa, the company said on February 9 in a trading statement, that persistent underperformance of the State-owned enterprises (SOEs) involved in Sasol’s value chain and the weaker global growth outlook continued to impact on the company’s business performance.

Sasol’s adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) for the six-month period are expected to be between R26.2-billion and R29.4-billion – between 8% and 18% lower than the adjusted Ebitda of R32-billion reported for the six-month period to December 31, 2022.

Sasol further advised that its earnings per share (EPS) were expected to be between R13.33 and R16.58 for the six months under review – a 29% to 43% decrease on the EPS of R23.23 reported for the prior comparable quarter.

A similar decline in headline earnings per share (HEPS) is expected, with the company forecasting HEPS of between R17.90 and R22.22. This represents a decrease of between 28% and 42% over the prior half-year HEPS of R30.90.

In addition, Sasol said its core HEPS (CHEPS) will also be 19% to 33% lower at between R16.43 and R19.86, compared with the prior half-year CHEPS of R24.55.

Sasol also noted that there remained unrealised gains of R2.7-billion on the translation of monetary assets and liabilities, and valuation of financial instruments and derivative contracts.

In addition, the company highlighted a net loss of R5.8-billion attributed to remeasurement items.

This included R3.9-billion relating to the Secunda liquid fuels refinery cash generating unit (CGU). The liquid fuels component of the Secunda refinery was fully impaired on June 30 last year. The value-in-use was further negatively impacted by an increase in forecast electricity tariffs and lower short-term Brent crude oil prices, resulting in the full amount of costs capitalised during the period being impaired.

It also included R600-million relating to the full impairment of Chemicals Africa’s chlor alkali and polyvinyl chloride CGU, and a R500-million partial impairment of the polyethylene CGU mainly as a result of lower selling prices associated with reduced market demand.

Sasol will publish its interim financial results on February 26.