Sasol shares surge on strong earnings

Shares of Sasol surged on the back of its blockbuster results, with the company reinstating dividends at a record R14.70 per share. The stock's upward trend, up over 3% and extending a 24% jump this year, was driven by higher profits fueled by elevated energy and chemical prices. Sasol's Chief Executive Officer, Fleetwood Grobler, joined CNBC Africa to discuss the company's performance and future prospects. Grobler reflected on the past year, acknowledging the macroeconomic challenges, including the pandemic, flood disasters, and geopolitical tensions like the War in Ukraine. Despite these hurdles, Sasol successfully navigated operational challenges, exceeding cost containment targets with sustainable savings and improved gross margins. The CEO highlighted the resilience of the team in the face of adversities, emphasizing the various initiatives undertaken to drive performance. Addressing concerns raised by market watchers, Grobler discussed the company's progress in reducing debt, with net debt now below $4 billion. Sasol's strategic asset divestment program has played a crucial role in debt reduction, while cost containment efforts have enhanced cash flow for debt repayment. Furthermore, Grobler elaborated on operational challenges, particularly lower coal exports, and safety incidents, assuring that corrective measures have been implemented to secure coal stockpiles. The conversation then shifted to environmental sustainability, with Grobler reaffirming Sasol's commitment to reducing greenhouse gas emissions by 30% by 2030. While supportive of carbon taxation, Grobler emphasized the need for clarity in implementation to avoid operational constraints. Sasol aims to work collaboratively with the government to ensure alignment with South Africa's national emissions reduction goals while maintaining operational viability. On the topic of renewable energy, Grobler highlighted Sasol's plans to achieve net zero emissions by 2050. The company is actively procuring 600 megawatts of renewable energy from independent power producers, with agreements in place to supply operations by 2025. Sasol's ambition extends to implementing an additional 600 megawatts in the following years, totaling 1.2 gigawatts of renewable energy integration by the end of the decade. In conclusion, Sasol's journey towards sustainability involves a multi-faceted approach encompassing operational efficiency, debt management, emissions reduction, and renewable energy adoption. The company's strategic initiatives underscore a commitment to long-term environmental stewardship and financial resilience in a rapidly evolving global landscape.