Sasol calls force majeure on chemicals exports following floods

Sasol Ltd. declared force majeure on some chemicals exports following catastrophic rains in South Africa’s KwaZulu-Natal province earlier this month.

The nation’s deadliest floods in almost three decades hobbled the Port of Durban, its busiest harbor. The disruption compounds problems at Sasol’s chemicals division, where full-year sales in Africa were already expected to be as much as 12% lower amid supply-chain issues and port congestion.

The volume outlook this quarter “could be impacted subject to the extent of infrastructure damage and the timing of the recovery,” Sasol said Monday in a statement, adding that any revision to guidance can’t yet be quantified. “At this stage, only production rates at certain plants in Sasolburg have been impacted” due to railroad damage.

The Johannesburg-based company had already been contending with extreme market volatility and macroeconomic uncertainty this year, which hampered its efforts to reduce debt. Sasol said it has decided to keep its oil hedging program in place to shield itself from further potential price slumps.

The company’s shares tumbled as much as 5.6%, the most this month, and traded down 5.5% as of 10:26 a.m. in Johannesburg.

Following crude’s recent rally amid Russia’s war in Ukraine, Sasol has “executed 85% of the oil hedging mandate” for the 2023 financial year, it said in the statement. The company reduced the amount of hedged production for the period to about 40% from 69% a year earlier.