SASOL said yesterday that things were looking up for the petrochemicals giant as it posted a 31 percent rise in revenue in the six months to December 30 on higher crude oil prices and increased demand following the easing of Covid-19 lockdown restrictions globally.

The group generated revenue of $4.86 billion (R773.9bn) compared with $3.7bn for the comparative period last year. Its financial performance was also underpinned by a favourable macroeconomic environment, refining margins and chemicals prices.

Sasol’s share price leapt more than 4 percent to R304.95 at intra-day trade, with the share having risen 86.55 percent in a year.

In its energy business, Sasol said it was realising higher gross margins and a 3 percent increase in sales volumes.

Gas production was 1 percent higher than planned, which was the result of further optimisation of wells as well as positive outcomes of the drilling programme in Mozambique.

Its Secunda Operations (SO) production forecast, after being revised downwards in December due to challenges with coal availability and quality, was now producing above the amended plan.

“We are making progress in restoring the stockpile at mining through increased productivity and coal purchases from external suppliers,“it said, adding that the mining productivity rate for December was 957 tons per continuous miner per shift (t/cm/s), resulting in a stockpile of 0.9 million tons.

Total chemicals external sales revenue for the first half of 2022 was 31 percent higher than the prior year, driven by higher average sales prices, offset by lower sales volumes.

“The higher prices were due to a combination of improved demand, higher oil prices and reduced market supply from continued global supply chain challenges attributable to the Covid-19 pandemic.” It said in the first half of 2022 it had divested from its Canadian Montney shale gas assets, as well as other small assets, further deleveraging its balance sheet.

Looking ahead, this month the group had seen increased natural gas allocation to SO, which boosted its SO production, however, it expected its SO production rates to remain constrained until its mining productivity rates increased and its coal stockpile was restored to targeted threshold requirements.

While there was some progress at its mining operations, there were still productivity challenges, as well as the high rainfall across its operating region, impacting coal purchases from open cast mines. It thus revised its coal stockpile levels output for the end of February to 1 to 1.1 million tons and its mining forecast productivity range of 950 to 1 040 t/cm/s and SO forecast production volumes of 6.7 to 6.8 million tons for 2022.

Sasol flagged that due to lower run rates at SO and an Eskom power outage in Sasolburg, it expected its annual fuels volumes to be knocked by 3.4 million barrels and had revised its outlook on sales volumes for the year to 51 to 53 million barrels, lower than previous guidance of 57 to 58 million barrels. “Imports will only be considered if determined to be economically viable and if required to meet contractual commitments,” it said.

Meanwhile its chemicals sales volumes for the full year of 2022 were expected to be 4 percent to 8 percent lower than the prior year – a downward revision to the previous guidance, largely due to lower production and sales volumes at Chemicals Africa and Chemicals America, respectively.

“Continued energy (oil, gas, coal price) volatility, increased geo-political tension in Europe and the impacts of the Covid-19 pandemic fuelled by the Omnicron variant, may influence volumes and prices for the remainder of the 2022 financial year”, it said.