Sasol share price reversing trend after operational update
Sasol has produced a steady operational performance across all its business segments
Key Takeaways:
- Steady operational performance: Sasol maintained consistent operational performance across all business segments, successfully meeting market expectations.
- Energy business improvements: Significant operational improvements were observed in Sasol’s Energy Business, particularly in Mining, Gas, and Secunda Operations (SO) during Q4 FY24. However, the liquid fuels segment faced profitability challenges.
- Growth in the chemicals segment: The Chemicals segment reported higher total sales volumes compared to FY23, aligning with market guidance.
- Supply chain management: Despite facing supply chain constraints, especially in South Africa, Sasol managed to mitigate these issues by proactively adjusting production rates and inventories at its international facilities.
- Improved margins and profitability: Although the Chemicals segment saw a 15% year-on-year decrease in product prices, the average sales basket price increased by 9% in H2 FY24 compared to H1 FY24.
Steady operational performance
Sasol has produced a steady operational performance across all its business segments, meeting market expectations despite the ongoing macroeconomic volatility.
The group’s Energy Business experienced significant operational improvements in Mining, Gas, and Secunda Operations (SO) during Q4 FY24. However, despite these advancements, the liquid fuels segment faced challenges, primarily due to lower diesel differentials and inflationary pressures. These factors affected the overall profitability of the segment.
Growth in chemicals and overcoming supply chain constraints
In the Chemicals segment, Sasol reported higher total sales volumes compared to FY23, aligning with market guidance. However, the segment faced supply chain constraints, particularly within South Africa, impacting its performance. To manage these challenges, Sasol's international facilities proactively adjusted production rates and inventories in response to lower demand. Despite a 15% year-on-year decrease in product prices, the average sales basket price increased by 9% in H2 FY24 compared to H1 FY24, leading to improved margins and higher overall profitability.
Sasol -technical analysis
The share price of Sasol has started to form a short to medium term trend reversal (from down to up). Traders of the reversal might hope to see a close above the 14900 level to unlock a potential move towards resistance at 17400. In this scenario a close below the 13010 support level might be used as a stop loss consideration.
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