Dublin, April 22, 2025 (GLOBE NEWSWIRE) -- The "Europe White Oil Market: Focus on Application, Functionality, Grade, Products, and Country Level Analysis - Analysis and Forecast, 2024-2034" report has been added to ResearchAndMarkets.com's offering.Europe's white oil market is projected to reach $1.59 billion by 2034 from $685.4 million in 2023, growing at a CAGR of 8.84% during the forecast period 2024-2034. In the European market, the white oil sector features a broad array of highly refined, mineral-bas ...

Investors with an interest in Oil and Gas - Integrated - International stocks have likely encountered both Sasol (SSL) and Exxon Mobil (XOM) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings esti ...

Sasol Limited (NYSE:SSL) Q4 2024 Earnings Conference Call February 24, 2025 2:00 AM ET Company Participants Tiffany Sydow - Vice President and Investor Relations Simon Baloyi - President and Chief Executive Officer Walt Bruns - Chief Financial Officer Victor Bester - Executive Vice President, Operations and Projects Sarushen Pillay - Executive Vice President, Business Building Strategy and Technology Hermann Wenhold - Executive Vice President, Mining, Risk Antje Gerber - Executive Vice President, Internatio ...

Group 1 - Sasol Limited (NYSE: SSL) has seemingly resolved recent civil unrest in Mozambique, which may positively impact its operations [1] - The figures from the Fuels and Chemicals Africa division are expected to align with the reported figures for 2024 [1] Group 2 - The analyst has a beneficial long position in the shares of SSL, indicating confidence in the company's future performance [2]

Industry Overview - The energy sector has shown resilience post-2022 supply shock, with the Energy Select Sector SPDR (XLE) increasing by 7.3% year to date as of September [1] - Growth in oil refiners has been a significant driver, benefiting from favorable spreads between oil and distillates, while explorers, producers, and equipment/services sectors have also gained [1] Geopolitical Factors - Geopolitical tensions, particularly between Israel and Iran, have significantly impacted the energy sector, with escalating threats of broader conflict [2] - Iran, a top 10 global oil producer, reached production levels of over 3.3 million barrels per day (bpd) in August, exporting about 2% of global supply [3] Oil Price Dynamics - OPEC and OPEC+ have agreed to increase joint output by 180,000 bpd from December as part of a supply plan for 2025, which is expected to drive up oil demand and prices [4] - Oil prices have recently climbed, with Brent crude surpassing $80 per barrel for the first time since August, closing at $80.93 per barrel, and WTI crude at $77.14 per barrel [4] Investment Opportunities - The cyclical nature of the energy sector suggests a potentially strong year ahead, prompting a focus on stocks well-positioned for investment [5] - Companies with strong growth potential include: - Sasol Limited (SSL) with an expected earnings growth rate of 174.4% and a Zacks Rank of 2 [7] - Core Laboratories Inc. (CLB) with an expected earnings growth rate of 18.8% and a Zacks Rank of 2 [8] - Nine Energy Service, Inc. (NINE) with an expected earnings growth rate of 35.8% and a Zacks Rank of 2 [9]

Currency and Economic Factors - The principal functional currency for operations is the rand, but a significant portion of turnover is impacted by the US dollar, affecting pricing and financial results[49]. - Fluctuations in the rand/US dollar exchange rate can materially affect business operations, cash flows, and financial position, with a weaker rand negatively impacting gearing due to foreign currency-denominated long-term debt[50]. - Economic, political, and social factors in operating regions may adversely affect operations and profitability, with macroeconomic uncertainties contributing to currency volatility[53]. - Political and social instability in regions such as South Africa poses risks to business operations, including challenges related to public finances and state-owned enterprises[54]. - High inflation risks could adversely affect capital projects, leading to cost overruns and schedule delays[63]. - Economic downturns in operating countries could reduce demand for products, adversely affecting financial results[79]. Operational Risks and Challenges - The service provider market in Mozambique is immature, leading to increased costs and potential disruptions in operations due to reliance on international contractors[66]. - Compliance with local content requirements in Mozambique may increase costs and affect the ability to fulfill contracts at acceptable rates[66]. - The company faces risks related to significant investments in associates and joint arrangements, which may impact financial results and cash flows[67]. - Disruptive industrial action in the South African labor market remains a risk, particularly during wage negotiations[60]. - Operations are reliant on stable electricity and water supply, with significant infrastructure challenges in South Africa impacting operational efficiency[69]. - Increased utility costs and infrastructure challenges may adversely affect the company's operations and financial position[69]. - Community protests and social unrest in Southern Africa may lead to business interruptions, impacting operational continuity[74]. - The company faces potential costs and reputational harm from operational interruptions due to extreme weather events and supply chain disruptions[73]. Regulatory and Compliance Issues - The company is subject to regulatory approvals and compliance obligations, which may change and impact project viability[63]. - The company is subject to regulatory scrutiny and potential litigation due to material weaknesses and restatements, which could have a material adverse effect on its business and reputation[77]. - Non-compliance with anti-corruption and anti-bribery laws poses significant risks, including potential criminal or civil sanctions[82]. - Changes in competition and consumer protection laws could expose the company to administrative penalties and civil claims, impacting its financial position[84]. - The company operates in multiple tax jurisdictions globally, facing complex tax laws that may lead to unexpected tax uncertainties[86]. - Legal and regulatory uncertainties, particularly between developed and developing countries, may affect the company's operational costs and decision-making[86]. - Compliance costs associated with new regulations on environmental and climate issues could significantly impact the company's financial position[89]. - The company is subject to increased scrutiny and potential liabilities due to public opinion regarding health and safety associated with chemical manufacturing[89]. - South African regulations require employers to comply with stringent occupational exposure limits, necessitating significant retrofitting of mature plants[89]. - The company has applied for extended time frames for compliance with evolving regulatory requirements, with some extensions granted and others pending[89]. - Changes in mining legislation in South Africa may adversely affect the company's mineral rights and compliance costs[86]. - The company may face significant fines and penalties for non-compliance with tax and environmental regulations, impacting its reputation and financial standing[89]. Financial Performance and Reporting - The company's dividend policy considers various factors, including overall market conditions and financial position, which may affect future dividend payments[68]. - The company identified material weaknesses in internal controls over financial reporting for the financial year ended June 30, 2024, which could adversely affect share price and investor confidence[75]. - Ineffective IT general controls in the Chemicals Eurasia segment and inadequate execution of revenue recognition controls for consignment inventory were noted as specific weaknesses[75]. - The company's financial results are heavily dependent on commodity prices, including crude oil, natural gas, and coal, with significant declines in these prices potentially reducing asset values[75]. - The potential impact of future amendments to mining regulations may have a material adverse effect on the company's operations and financial results[86]. Environmental and Climate Change Factors - Environmental regulations and carbon cost regulations could lead to fines or penalties, negatively impacting the company's financial results and operational license[79]. - The carbon tax in South Africa has increased from R120/tCO2e in 2019 to R190/tCO2e in 2024, with projections to reach R308 by 2026 and R462 by 2030, significantly raising operational costs[93]. - The transition to low-carbon resources is critical, with access to such resources impacting future production and financial performance[93]. - The company faces risks related to intellectual property, including potential loss of competitive advantage due to patenting by competitors and the transfer of know-how[92]. - There is a risk of reputational damage and increased litigation related to climate change disclosures and compliance with evolving regulations[91]. - Stakeholder activism related to GHG emissions and coal usage could negatively impact Sasol's shareholder base and financing capabilities[105]. Human Capital and Organizational Structure - Sasol announced a streamlining program in April 2024 aimed at enhancing efficiencies and reducing complexity within the organization[110]. - The company is highly dependent on human capital to deliver on its strategic objectives and sustainably grow into the future[110]. - Challenges remain around attracting and retaining critical skills to support current and future business requirements[110]. - The quality and availability of skills in certain labor markets may be impacted by challenges within education and training systems[110]. - If the streamlining program is not successful, the anticipated benefits may not be realized, adversely affecting operating results and financial position[110]. - The ability to attract skilled resources may be influenced by slow hiring times and a general scarcity of specialist skills[110]. - Sasol's overall focus includes attracting, developing, and retaining diverse, skilled, and experienced employees[110]. Research, Development, and Innovation - Sasol's investment in research and development for 2024 is R1,516 million, maintaining the same level as in 2023, which was an increase from R1,280 million in 2022[123]. - The total number of worldwide patents held by Sasol decreased from 2,590 in 2022 to 2,282 in 2023, and further to 1,795 in 2024[123]. - Sasol's proprietary technologies and skilled workforce support its competitive advantage in the chemicals and energy sectors[122]. Production and Operations - The company operates globally, with no significant seasonal fluctuations in sales volumes, which are influenced by macro-economic factors[117]. - Sasol's Chemicals Business utilizes feedstocks such as kerosene, benzene, ethane, ethylene, oleochemicals, and aluminum, which are purchased externally[4]. - The Sasol Slurry Phase Distillate (SPD) process converts natural gas into environmentally friendly GTL diesel and kerosene, integrating proven technologies[125]. - Sasol has established a 50/50 joint venture with Haldor Topsøe to develop sustainable aviation fuel plants, focusing on non-fossil feedstock[125]. - The marketing agreement with Equistar Chemicals for polyethylene sales is set to expire on November 30, 2030[125]. - Sasol's Chemicals America segment produces polyethylene marketed by Equistar Chemicals, with ethylene either consumed internally or sold externally[120]. Legal and Litigation Matters - The company is currently engaged in various legal and regulatory proceedings, which may adversely affect its business and financial position[91]. - Sasol has launched two judicial review applications against SARS decisions regarding tax assessments[127]. - The Minister upheld Sasol's appeal regarding load-based emissions standards, allowing implementation from April 1, 2025, to March 31, 2030[127]. - Sasol Oil initiated a legal review to overturn the NERSA approval of the Transnet pipeline tariff for 2023/4, claiming non-compliance with the Petroleum Pipelines Act[136]. - Sasol is involved in a dispute with Murray & Roberts Power regarding additional costs amounting to approximately R322 million[146]. - Sasol's legal proceedings related to the NERSA tariff approval for 2024/5 are also planned, following the current litigation[136].

Appointment of Company Secretary - Sasol Limited appointed Ms. Elizna Viljoen as Group Company Secretary effective January 1, 2025[5] - Helaine Joubert will continue as Acting Group Company Secretary until December 31, 2024[8] Experience and Expertise - Ms. Viljoen has over 23 years of experience in the company secretarial field, previously leading teams at Anglo American[6] - The Board believes Ms. Viljoen's expertise will add significant value to its operations[8] Compliance and Governance - The appointment aligns with JSE Listing Requirements, ensuring compliance and governance standards[7]

Financial Data and Key Metrics Changes - Sasol experienced a significant decrease in cash generation and profitability compared to the prior year, with adjusted EBITDA and cash generated by operations decreasing by 9% and 19% respectively [21][22] - Free cash flow for the financial year decreased by 60% compared to the prior year, but improved from a negative ZAR6 billion in the first half to a positive ZAR8 billion at the end of the financial year [23] - Cash fixed costs increased by 1%, well below inflation, and cash fixed costs decreased by approximately 5% when excluding inflation and exchange rate movements [21] Business Line Data and Key Metrics Changes - The mining business saw a 4% decline versus the prior year, largely due to lower export coal prices and higher external coal purchase prices [26] - The gas business was down by 6%, mainly due to lower weighted average gas prices, although increased sales volumes partially offset this decline [27] - Chemicals Africa adjusted EBITDA decreased by 31% due to lower dollar-based sales prices, while Chemicals America adjusted EBITDA increased by more than 100% to approximately ZAR3.5 billion due to higher sales volumes and improved margins [27][28] Market Data and Key Metrics Changes - Oil prices softened in the second half of the financial year, decreasing by 3% compared to the prior financial year, partially offset by a 5% weaker rand [19] - Petrol differentials increased by 13%, while diesel differentials decreased by 22% compared to last year, negatively impacting the fuels business [20] - Sasol achieved polyethylene prices decreased by 8% due to persistent weak demand and global oversupply [20] Company Strategy and Development Direction - Sasol's strategy is centered around two pillars: strengthen and grow, and transform, focusing on enhancing delivery from core businesses and maximizing cash flow [36] - The company aims to optimize and transform its portfolio by leveraging existing assets and exploring new sustainable growth opportunities [36] - Sasol is committed to reducing greenhouse gas emissions and carbon intensity, with ongoing efforts to optimize its GHG roadmap [16][37] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by operational issues and the macro environment, emphasizing the need for agility and cost discipline [19][20] - The outlook for FY 2025 includes a focus on improving efficiency and driving targeted innovation, with expectations for increased production and sales volumes [33][34] - Management expressed confidence in the company's ability to step up performance and deliver sustainable shareholder returns over the long term [24][31] Other Important Information - Sasol's successful conclusion of the PR related to clause 12A of the minimum emission standards allows for the implementation of solutions to reduce sulfur dioxide emissions starting April 2025 [12] - The company has launched the Sasol 2.0 transformation program, which has delivered a cumulative total of ZAR16 billion of EBITDA enhancements by FY 2024 [28] - Sasol is exploring options for future LNG supply to address gas depletion in Mozambique, with ongoing engagement with customers to secure demand [41][54] Q&A Session Summary Question: What has caused the impairments leading to losses experienced by the group? - Management explained that impairments are an accounting aspect triggered by a significant decline in long-term pricing, particularly in the U.S. chemical assets, which led to a reassessment of asset values [48][49] Question: Are there plans to exit from Chemicals America? - Management clarified that the assessment of cash-generating units does not imply any ambition to sell or restructure the portfolio, but rather relates to the evaluation of asset performance [49] Question: What is the plan regarding the balance sheet and cash management? - Management indicated that maintaining sufficient liquidity is crucial for refinancing and that proactive management of the balance sheet will continue [64] Question: Can you provide clarity on the longer-term EBITDA generation from the Chemical America complexes? - Management acknowledged that the impairment has affected the previously guided EBITDA range, but specific figures were not provided during the session [66]

Production and Sales Metrics - Sasol's Secunda operations saw a 1% increase in production volumes year over year, attributed to a phased shutdown in fiscal 2024 compared to a total shutdown in the previous period [2] - Liquid fuels sales volumes decreased by 4% due to challenges in the South African diesel market and strategic inventory optimization [2] - Total mining production rose by 3% year over year, driven by improved operations at Thubelisha colliery and better performance at Transnet Freight Rail [6] - Saleable coal production decreased by 2%, but export sales volumes increased by 5% over fiscal 2024 [6] Chemicals Business Challenges - The chemicals segment faced a tough year, with sales revenues from South African operations down 11% due to lower prices [18] - The average sales basket price dropped by 13% from fiscal 2023, reflecting weaker global demand and lower oil prices [18] - U.S. chemical assets experienced a 12% decline in sales revenues despite a 3% increase in sales volumes [18] Gas Production in Mozambique - Sasol's gas production in Mozambique increased by 6% in fiscal 2024, surpassing market expectations [12] - The early start of production from the PSA initial gas facility in May significantly contributed to this growth [12] - Natural gas and methane-rich gas sales volumes in South Africa rose by 4% and 7%, respectively, due to higher production and increased external demand [12] Market Outlook - Sasol is set to release its financial results for fiscal 2024 on August 20, along with its outlook for fiscal 2025 [3] - Investors are keen to see how the company plans to navigate ongoing challenges in the energy market while capitalizing on operational improvements [3] - Sasol's shares increased by 10.12% in trading, driven by excitement over increased coal exports despite a 2% decline in saleable coal production [11]

Company Overview - Sasol is a leading provider of liquid fuels in South Africa and a major international producer of chemicals, utilizing proprietary Fischer-Tropsch technology to manufacture synthetic fuels from low-grade coal and natural gas [2][10] - The company operates the only inland crude oil refinery in South Africa and is involved in the exploration, production, and distribution of natural gas and oil, as well as marketing fuels and lubricants [2] Industry Outlook - The chemical sector is expected to experience a gradual recovery in 2024, with improvements anticipated in the second half of the year, supported by increased production volumes and stabilizing prices [3] - Industry leaders like BASF SE and Huntsman Corporation have noted this trend, positioning Sasol to capitalize on the recovery [3] Strategic Initiatives - Sasol is investing in green hydrogen production and renewable energy partnerships, enhancing its operational efficiency and reducing its carbon footprint [4][19] - The company is focused on free cash flow generation and decarbonization, aligning with global sustainability trends and enhancing its attractiveness to environmentally conscious investors [11][19] Financial Performance - Despite facing earnings challenges and market pressures, Sasol's shares are currently trading at 2.36 times forward earnings, significantly below the industry average of 9.47 and its 5-year median of 4.71, indicating an attractive valuation for potential investors [5] - The company also boasts a solid dividend yield, reflecting its commitment to returning value to shareholders [5] Political Environment - Recent political developments in South Africa suggest a more business-friendly environment, with a coalition government indicating a shift toward pragmatic policies that support economic growth and infrastructure development [18] - This political stability is expected to enhance Sasol's operational resilience and long-term growth prospects [18] Investment Opportunity - Sasol's stock has declined approximately 26% year-to-date, contrasting with the S&P 500's increase of over 16%, presenting a potential "buy-the-drop" opportunity for investors [15] - The company's strengths, including its pioneering technology and anticipated sector recovery, suggest significant upside potential, making it an attractive investment for value-oriented investors [16] - The Zacks average price target of $15.60 per share indicates a nearly 112% upside from current levels, further supporting the investment case [21]