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#1 Dusty Mountain

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Posted 08 March 2022 - 02:01 PM

I know they hedged their oil to some extent so they will not get full benefit from these high oil prices, there are surely some profit taking going on and still no dividend, but why is the share price struggling this much?

 

Not sure how much if any from their revenues are generated (chemical sales or other products) through sales to Russia which might be lost due to sanctions but surely looking at current oil prices it should trade closer to the R400+ mark than at current levels?

 

What am I missing?

 

They seem to be losing quite a bit of the cream on their not well played hedges.

 

SASOL RESTRUCTURES EXISTING OIL HEDGES AND INCREASES THE HEDGE
COVER RATIO FOR OIL FOR FINANCIAL YEAR 2022

Sasol has made significant progress in deleveraging its balance sheet following a strong
operating performance in a more supportive macroeconomic environment, continuing cash
conservation measures and ongoing asset divestments. One of the Company?s main
objectives remains to reduce absolute debt levels, which will trigger the consideration to
resume dividend payments. Debt metrics are currently following a positive trajectory but may
still be negatively impacted by oil price volatility.

The current hedging program consists mainly of put options and provides protection against
oil prices decreasing to below approximately US$43,11 per barrel. Following the recent
material rise in the oil price, Sasol has been able to restructure and enhance its financial year
2022 hedging programme, ensuring cash flow robustness and protection against future oil
price volatility.

The existing oil put hedges of 24 million barrels for financial year 2022, as reported in the
Production and Sales Metrics ending 31 March 2021, have been restructured and replaced by
a zero cost collar hedging structure. This has allowed the Company to increase the gross
average floor oil price on the existing 24 million barrels from US$43,11 per barrel to
approximately US$60,09 per barrel, albeit with a cap of approximately US$71,97 per barrel.
The premium paid on the original put options for financial year 2022 will be realised as an
expense of approximately US$30 million to US$34 million, reflecting the cancelled options and
new hedges which were executed in terms of the updated hedging strategy.

The oil hedge cover ratio for financial year 2022 has also been increased by hedging an
additional 18 million barrels or an incremental 4,5 million barrels per quarter. This was
achieved by increasing the hedge cover ratio from 80% to 90% of total Synfuels synthetic
crude oil production, and including 90% of Sasol?s share of Oryx production and equivalent
commodity chemicals volumes where there is a strong correlation to oil price.

The incremental 4,5 million barrels for quarter one to three of financial year 2022 have been
executed using swaps at an average strike level of US$67,52; US$67,03 and US$67,21 per
barrel respectively. Completion of the last 4,5 million barrels for quarter four is still in progress.
The actual realised chemical margins for the base chemical sales volumes for financial year
2022 will be unaffected by this hedging program.

The updated hedging levels underpin the strengthening of the balance sheet and the reduction
of the Company?s absolute debt levels. The restructuring was focused on financial year 2022
only. The Company will however continue to update the market on any changes to our financial
risk management positions in our quarterly market disclosures.


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#2 Dusty Mountain

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Posted 08 March 2022 - 01:51 PM

I know they hedged their oil to some extent so they will not get full benefit from these high oil prices, there are surely some profit taking going on and still no dividend, but why is the share price struggling this much?

 

Not sure how much if any from their revenues are generated (chemical sales or other products) through sales to Russia which might be lost due to sanctions but surely looking at current oil prices it should trade closer to the R400+ mark than at current levels?

 

What am I missing?

Yes agree, but the insider sales, although not much, is also telling.

Was expecting this sp to have remained on its green trajectory.


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#3 JR7800

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Posted 08 March 2022 - 09:16 AM

I know they hedged their oil to some extent so they will not get full benefit from these high oil prices, there are surely some profit taking going on and still no dividend, but why is the share price struggling this much?

 

Not sure how much if any from their revenues are generated (chemical sales or other products) through sales to Russia which might be lost due to sanctions but surely looking at current oil prices it should trade closer to the R400+ mark than at current levels?

 

What am I missing?


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#4 JR7800

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Posted 04 March 2022 - 06:56 AM

One needs to consider what the effect will be on the share price WHEN they resume divs. Not if.

 

Dividend history Date paid/payable Dividend number SA cents US cents FY19 Interim Dividend 18 March 2019 79 590     28 March 2019     30.63 FY18 Final Dividend 10 September 2018 78 790     20 September 2018     39.48 FY18 interim Dividend 19 March 2018 77 500     29 March 2018     31.09 FY17 final dividend 11 September 2017 76 780     21 September 2017     46,13 FY17 interim dividend 20 March 2017 75 480     30 March 2017     28.29 FY16 final dividend 3 October 2016 74 910     13 October 2016     66.44 FY16 interim dividend 11 April 2016 73 570     21 April 2016     30.84 FY15 final dividend 12 October 2015 72 1150     22 October 2015     70.54 FY15 interim dividend 13 April 2015 71 700     23 April 2015     46.88 FY14 final dividend 13 October 2014 70 1350     24 October 2014     101 FY14 interim dividend 14 April 2014 69 800  

 

Personally with the price as high as it is even if they resume dividends at the best  dividend rate in last 8 years (2014) of R21.50 per share I cannot see the share increase by much more than double the dividend so lets make it R50 (12.5% from R400 base) increase per share. In the past when  it was almost inconceivable that Sasol would not pay a dividend it might have moved up by R100 but with no dividend for almost last 3 years still fresh in peoples minds I do not expect the share to move much higher when dividends are resumed and I would in any case not be expecting a record dividend first time round, maybe R5 to R8 per share.

 

This is all of course just my opinion and most probably not worth much.


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#5 new john

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Posted 03 March 2022 - 08:01 PM

One needs to consider what the effect will be on the share price WHEN they resume divs. Not if.
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#6 CasualTrader

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Posted 03 March 2022 - 01:26 PM

I am sitting with Sasol being 90% of my portfolio. Steinhoff 5% and then Aveng and Arcelormittal at 2% each. I bought Sasol in tranches eventually ending on ave of R68 per share. Agree that probably not a bad idea to sell some (I was thinking of 1000 too). Should have sold this morning when it was above R400 - greedy me). I don't have Redefine, but it has been doing well and have had a look. If I do sell the 1k shares I might put some of the proceeds in there.

And I should have bought a lot more Arcelormittal. I bought those are 45c.


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#7 CasualTrader

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Posted 03 March 2022 - 01:25 PM

Sitting with the same problem/question.

 

For me personally I have the following problem:

- Sasol due to massive increase in share price over last 12 months resulted in the value of the share comprising +/-34% of my total portfolio

- On last update, I was anticipating better results and the resumption of the Dividend which also was not forthcoming

 

I think (personal opinion) that SAUDI will start to release oil reserves soon and this will bring back oil, on average closer to $90 a barrel for the next 12 months.

 

If the oil price comes down Sasol will come down. Personally I think Sasol has a higher chance to fall R100 per share that gaining another R100 per share.

 

I am looking at selling Sasol and investing the proceeds in Redefine (REIT) after the 8th of March (Redefine corporate action) for the following reasons:

Taking 1,000 Sasol shares as an example at R400 per share equating to R400,000 capital.

 

If Sasol resumes dividends and hoping for R20 per share you can generate R20,000 in dividends tax free. And if Sasol goes up another R100 per share you can generate another R100,000 in proceeds.

 

One can purchase +/-93,000 Redefine shares with R400,000.

 

Last dividend paid was R0.60 per share = R55,800 after tax R36,270 (working on 5% effective tax rate as it is a REIT dividend) so exceeds potential Sasol dividend.

I personally think looking at the last result presentation and shar price history that there is a fairly good chance of this share increasing by R4 over next couple of years which means a potential proceed increase of R372,000 compared to Sasol's R100,000 increase on fairly over valued share at current price.

 

I was hoping Sasol will get to R420 per share today cause this is what I would be selling this and following my crazy idea as set out above.

 

Sasol currently at R393. Will see where it goes today and tomorrow.

 

Any other investment ideas for everyone's Sasol profits??? 

I am sitting with Sasol being 90% of my portfolio. Steinhoff 5% and then Aveng and Arcelormittal at 2% each. I bought Sasol in tranches eventually ending on ave of R68 per share. Agree that probably not a bad idea to sell some (I was thinking of 1000 too). Should have sold this morning when it was above R400 - greedy me). I don't have Redefine, but it has been doing well and have had a look. If I do sell the 1k shares I might put some of the proceeds in there.


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#8 JR7800

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Posted 03 March 2022 - 12:05 PM

Any thoughts on if SASOL shares should be sold or should one hold. Inclined to sell part of my holdings.

 

Sitting with the same problem/question.

 

For me personally I have the following problem:

- Sasol due to massive increase in share price over last 12 months resulted in the value of the share comprising +/-34% of my total portfolio

- On last update, I was anticipating better results and the resumption of the Dividend which also was not forthcoming

 

I think (personal opinion) that SAUDI will start to release oil reserves soon and this will bring back oil, on average closer to $90 a barrel for the next 12 months.

 

If the oil price comes down Sasol will come down. Personally I think Sasol has a higher chance to fall R100 per share that gaining another R100 per share.

 

I am looking at selling Sasol and investing the proceeds in Redefine (REIT) after the 8th of March (Redefine corporate action) for the following reasons:

Taking 1,000 Sasol shares as an example at R400 per share equating to R400,000 capital.

 

If Sasol resumes dividends and hoping for R20 per share you can generate R20,000 in dividends tax free. And if Sasol goes up another R100 per share you can generate another R100,000 in proceeds.

 

One can purchase +/-93,000 Redefine shares with R400,000.

 

Last dividend paid was R0.60 per share = R55,800 after tax R36,270 (working on 5% effective tax rate as it is a REIT dividend) so exceeds potential Sasol dividend.

I personally think looking at the last result presentation and shar price history that there is a fairly good chance of this share increasing by R4 over next couple of years which means a potential proceed increase of R372,000 compared to Sasol's R100,000 increase on fairly over valued share at current price.

 

I was hoping Sasol will get to R420 per share today cause this is what I would be selling this and following my crazy idea as set out above.

 

Sasol currently at R393. Will see where it goes today and tomorrow.

 

Any other investment ideas for everyone's Sasol profits??? 


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#9 CasualTrader

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Posted 03 March 2022 - 09:53 AM

Any thoughts on if SASOL shares should be sold or should one hold. Inclined to sell part of my holdings.

 


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#10 CasualTrader

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Posted 02 March 2022 - 09:50 AM

Because of Sasol, the beautiful hedge that it is, my entire portfolio is still Green for the day.

I have a couple of other shares and frankly don't care what happens to them. It's all Sasol at the mo.


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#11 new john

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Posted 24 February 2022 - 10:20 AM

Because of Sasol, the beautiful hedge that it is, my entire portfolio is still Green for the day.
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#12 JR7800

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Posted 21 February 2022 - 10:23 AM

No dividend and so so 6 months.... Very disappointing

 

 


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#13 CasualTrader

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Posted 09 February 2022 - 01:29 PM

Ouch, not a good day.

 


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#14 Snippit

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Posted 07 February 2022 - 01:27 PM

https://el834862649..../sasol-sol-jse/

 

Intermediate wave (5) extends, suggesting a manufactured cause. The correction target distances itself accordingly.

 

sol-d-070222.png?w=880

 

Link – Higher Quality Image

 


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#15 new john

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Posted 03 February 2022 - 10:31 AM

Stop it. I can only get so wet.


Shell reports sharp upswing in full-year profit, raises dividend and buybacks


https://www.cnbc.com...gs-q4-2021.html

Lets hope Sasol follows suit......


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#16 JR7800

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Posted 03 February 2022 - 10:03 AM

Shell reports sharp upswing in full-year profit, raises dividend and buybacks

 

 

https://www.cnbc.com...gs-q4-2021.html

 

Lets hope Sasol follows suit......


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#17 CasualTrader

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Posted 18 January 2022 - 02:47 PM

Brent crude is up
Been on an upward trend since crash
Rand hedge
Commodities cycle
Testing resistance

Who knows. Maybe…. Just maybe, rumors of dividends of making the rounds. Wouldn’t that be nice!

Thanks new john. Dividends will be welcome. 


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#18 new john

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Posted 18 January 2022 - 02:45 PM

Brent crude is up
Been on an upward trend since crash
Rand hedge
Commodities cycle
Testing resistance

Who knows. Maybe…. Just maybe, rumors of dividends of making the rounds. Wouldn’t that be nice!
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#19 CasualTrader

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Posted 18 January 2022 - 02:40 PM

Any news? Why is SASOL up so much today?


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#20 JR7800

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Posted 18 January 2022 - 12:41 PM

Hi. If everyone could stop selling at 300, that would be great!

 

Agree...


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