Sasol Experiences Marked Annual Drop as Investors Scrutinize Strategy Intensively -

Sasol’s stock is poised for its most significant annual decline on record as investors evaluate the company’s approaches to address environmental and operational challenges.

Read: Major Sasol petrochemical facility confronts significant challenges …

The Johannesburg-based company heavily depends on coal for its synthetic production at the Secunda facility, which is recognized as the world’s largest single emitter of greenhouse gases. Sasol is aiming to reduce emissions by 30% by 2030, contingent on replacing some of its dirtiest fossil fuel sources with gas; however, its gas reserves in Mozambique are diminishing.

Sasol’s shares took another hit on Monday, plunging an unprecedented 56% this year. This poses a substantial hurdle for CEO Simon Baloyi, who took the helm in April. In remarks to a local publication, Baloyi hinted that the company’s emissions target might be viewed as a range, a stance that has faced criticism from environmental advocates.

Moreover, Baloyi noted that the company will reassess its asset portfolio following reports of R56.7 billion in impairments tied to its operations in both the US and South Africa.

Read: Sasol shares drop following disappointing performance metrics

Analysts at Bloomberg Intelligence suggest that additional write-downs at the Secunda plant seem necessary, given the company’s requirement to lessen coal utilization to fulfill its emissions reduction objectives.

Once the leading company by revenue in South Africa, Sasol now requires a more profound strategic transformation by 2050 to achieve net-zero emissions.

Moody’s Ratings indicated that the company faces “substantial exposure to carbon transition risk,” necessitating significant investment, as outlined in their recent review on October 10.

Read: Examining Sasol’s losses

Baloyi’s predecessor, Fleetwood Grobler, had laid out plans to implement green hydrogen—a nascent technology that generates energy without emitting greenhouse gases by splitting water using renewable energy sources.

Nonetheless, BloombergNEF reports that this technology remains financially unfeasible for now.

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