Sasol, the world’s largest producer of fuel from coal, is reaping the benefits of a surge in fuel prices due to the Iran war, while helping shield its home market of South Africa from the resulting supply shock.
CEO Simon Baloyi has increased his focus on coal-to-liquids fuel output, along with production from its crude refinery, at an opportune time.
“Sasol continues to play a very key and meaningful role into what I will call the national security of the country,” Baloyi said in an interview in Bloomberg Johannesburg office on Tuesday. The company needs to preserve the Fischer-Tropsch process technology “to make sure that we can produce the required critical chemicals during a time like this,” he said.
The company expects to report earnings before interest, taxes, depreciation and amortization of as much as R62-billion in the year ended June 30, Sasol said in a filing on Wednesday. That compares with R52-billion in the same period a year earlier.
Sasol’s coal-to-liquids technology makes it one of South Africa’s largest greenhouse gas emitters, putting it at odds with environmental groups. Investors, however, are weighing the long-term sustainability of the business against its plan to cut emissions 30% by 2030.
