Avior Capital Markets - Sasol Limited (103M) Sasol | Q3 19 production and sales update

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Avior Capital Markets

Wade Napier

Sasol | Q3 '19 production and sales update

Sasol (SOL) released a softer than expected Q3 '19 trading update. Barring the strong recovery in Secunda Synfuels' Operations (SSO) production which reached a 7.8mt per year run rate, we were underwhelmed across the Group. Disappointingly, SOL lowered its FY '19 production guidance at Oryx following a prolonged factory shut and in Performance Chemicals due to a slower ramp up and weaker demand following the Force Majeure which occurred in Q2 '19. Elsewhere, SOL reiterated that the Lake Charles Chemicals Project can meet revised guidance. However, management noted that LCCP poised to come in at the high-end of its USD11.6bn to USD11.8bn capex guidance. Given SOL's past performance, tracking towards the high-end of capex guidance raises the risk of the Group exceeding spending.

23/04/2019 9 EN

Underlying

Sasol Limited

Sasol is engaged in manufacturing and marketing of liquid fuels, gas and chemicals. Co. adds value to coal, oil and gas reserves, using these feedstocks to produce liquid fuels, fuel components and chemicals. Co. mines coal and refines imported crude oil and retails liquid fuel products in South Africa, and produces gas and condensate in Mozambique and oil in Gabon. Co. also supplies fuels to oil companies in South Africa and others in South Africa and sub-Saharan Africa. Co. maintains its chemical manufacturing and marketing operations worldwide. Co. divides its operations into three focused business clusters: South African Energy Cluster, International Energy Cluster and Chemical Cluster.

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ZAE000006896 Johannesburg Stock Exchange South Africa

Provider

Avior Capital Markets

Avior is a globally recognised capital markets research and trading firm, with the broadest research coverage within the region, with 100+ SA and 20+ SSA companies under coverage. Avior services clients from offices in London, Cape Town and Johannesburg.

Our research quality is consistently recognised in local and global surveys, with 18 analysts currently rated in their respective sectors (FM 2017). Value add through in-depth, innovative, high quality and consistent research with comprehensive underlying fundamental modelling supported by regular analyst and roadshow interactions.

Avior has proven that by working closely with our clients we can mutually develop dominant positions in certain sectors, going from strength to strength. Avior has a dedicated ESG team, having been ranked #1 in Corporate Governance research since 2008.

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Analysts

Wade Napier

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