(Bloomberg) -- Sasol Ltd. shares fell the most in more than a year after the synthetic fuel and chemical maker reported issues throughout its South African operations.

The company that manufactures fuel from coal saw production volumes at its Secunda hub in the three months through March drop 9% from the previous quarter “due to reduced overall equipment availability and operational instability,” Sasol said in a sales update on Tuesday. Volumes for the financial year are expected at between 6.9 and 7.1 million tons, missing guidance of 7-7.3 million tons.

The shares slid as much as 8.8% in Johannesburg, their sharpest drop February 2023, to trade at a one-month low.

Mining operations that have plagued Sasol showed improvement in fiscal third quarter, “albeit at a slower pace than anticipated,” the company said. A fatality in March that brought the total for the year to five, along with other operational issues, has lead to coal production tracking at the lower end of its guidance.

Analysts at Morgan Stanley said Sasol’s synthetic fuels volumes for the quarter missed their estimates, while the upper range of its revised full-year guidance is just below the broker’s projection of 7.15 million tons. Quarterly chemical revenue was in line with their expectations, analysts Christopher Nicholson and Brian Morgan wrote in a note.

What Bloomberg Intelligence Says:

Sasol’s ongoing supply chain disruptions and 3Q production challenges will likely keep its Africa chemicals sales-volume growth at the lower end of its updated 0-5% guidance, which could trim fiscal 2024 consensus revenue estimates from the current 267 billion rand. Downgraded guidance for its Natref refinery’s crude oil rate following steam-supply interruptions in 3Q and illegal hot tapping in 1Q is also disappointing.

— Salih Yilmaz, BI global energy analyst

Sasol said it expects “macro volatility to persist” through the last financial quarter, “with geopolitical risks remaining elevated, negatively impacting our business performance.”   

--With assistance from James Cone.

(Adds comment from Bloomberg Intelligence analyst.)

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