Trading Day – Big blow to Sasol

Due to the Transnet strike, Sasol was forced to declare force majeure on certain chemical exports, forcing it to scale back operations on certain Secunda and Sasolburg plants.

Production rates at certain Secunda and Sasolburg plants had to be scaled back, and the full impact is unclear as the time needed to clear port and rail backlogs are still uncertain.

Meanwhile, Clicks Group reported a healthy increase in earnings with Headline earnings per share (HEPS) from continuing operations of R10.33.

In other news, Tesla shares fell 4.3% in after-market trading after the company missed delivery and revenue expectations.

US and Asian market momentum stalled, as the S&P 500 dropped 0.7% and the Nasdaq closed 0.9% lower.

The Nikkei 225 is down 0.8% in early morning trade, while the Hang Seng is down 1.6%.

The Hang Seng has recovered from a sharp low in the opening hour, which set a new low last seen in May 2009.

Here is the biggest news of the day.

• Sasol was forced to declare force majeure on certain chemical exports due to the Transnet strike. Production rates at certain Secunda and Sasolburg plants had to be scaled back. The full impact is unclear as the time needed to clear port and rail backlogs are still uncertain. Natref was able to continue to operate without disruption of the Transnet pipelines. The company also experienced a fire at its new Ziegler alcohol unit at the Lake Charles Chemicals Complex but was able to contain it without injuries. An investigation is underway to determine the cause, the extent of the damage, and the scope and timeline of repair.

• Satawu throws in the towel on continuing the Transnet strike. Amanda Tshemese, spokeswoman for the smaller of the two main labour unions at South Africa’s state-owned port and rail operator, noted that they still do not agree with the settlement but said that “In the interest of the economy, the majority has signed and we just have to release our members.”

• Clicks Group reports a healthy increase in earnings. Turnover for the year ended August 2022 grew by 6% to R39.6 billion. Headline earnings per share (HEPS) from continuing operations grew 30.1% to R10.33. The company declared a dividend of R6.37 per share, up 30% from last year. Cash generated from operations amounted to R4.3 billion.

• Tesla misses delivery and revenue expectations. Its shares fell 4.3% in after-market trading. Revenue for the third quarter was a record $21.45 billion but still fell short of analyst expectations of $21.96 billion, while gross margins decreased from 30.5% last year to 27.9%. Earnings per share (EPS) came in at $1.05. Tesla expects to miss its full-year delivery targets due to logistical challenges but is still seeing excellent demand for its vehicles, addressing investors’ concerns that buyers could be discouraged by the weak global economy and high prices for Tesla vehicles. “I wouldn’t say we’re recession-proof, but it’s certainly recession resilient,” Elon Musk said.

• US President Joe Biden releases 15 million more barrels of oil from the strategic petroleum reserve (SPR). The SPR is still more than half full, with around 400 million barrels of oil. The US government plans to refill the SPR at a profit whenever oil prices fall to $70 a barrel. This also aims to provide an incentive for oil companies to ramp up production, knowing they have a guaranteed floor price for their product.

• Momentum Metropolitan CEO, Hillie Meyer, has bought just under R800 000 worth of shares in the company.