Sasol share price slumps amid operational, financial challenges

OVER the past year, Sasol's share price has been on a troubling downward trajectory, reflecting a series of operational and financial hurdles that have beleaguered the integrated fuel-from-coal and chemicals giant.

- EDWARD WEST

On Tuesday, Sasol's shares fell by 2.54%, to R129.45 at the afternoon, a stark contrast to the price of R170.96 just one year ago. This decline mirrors a more substantial drop over three years, from R367.22, effectively halving the share value.

Industry analysts attribute this distressing trend to a cocktail of operational challenges plaguing the company. Problems such as the extraction of low-quality coal, rising costs, diminished natural gas volumes transported from Mozambique, and inadequate feedstock supply have severely hampered production.

Rising unit costs at the Secunda facility have compounded these pressures, according to Lester Davids, a research analyst at Anchor Capital.

A looming increase in urban tax, driving up reductions in tax-free allowances, has further jeopardised Sasol's investment case.

A more pronounced issue is the sharp downturn in global chemicals pricing.

Sasol's share price performance is directly tied to the trajectory of oil and chemicals prices. Tariffs persist and global economies slide into recession, stoking concerns over lower risks.