JOHANNESBURG, Feb. 21, 2022 /PRNewswire/ --
Earnings performance
Earnings before interest and tax (EBIT) was R24,3 billion, an
increase of 12% compared to the prior period. This performance was
underpinned by a strong macroeconomic environment with higher crude
oil prices, refining margins and chemicals prices coupled with
increased demand, negated by lower production volumes due to
operational challenges at our Secunda Operations (SO).
Earnings were impacted mainly by the following non-cash
adjustments:
- Reversal of impairments of R1,4 billion mainly due to a higher
price outlook on the back of a sustained increase in demand for
alcohols into the personal hygiene market during and post the
COVID-19 pandemic;
- R4,9 billion gain on the realisation of the foreign currency
translation reserve (FCTR), on the divestment of our Canadian shale
gas assets;
- Losses of R0,1 billion on the translation of monetary assets
and liabilities due to a 3% weakening of the closing rand/US dollar
exchange rate compared to 30 June
2021; and
- Losses of R5,3 billion on the valuation of financial
instruments and derivative contracts.
Key
metrics
|
Half
year
31 Dec
2021
|
Half
year
31 Dec
2020
|
Change
%
|
EBIT (R
million)
|
24
309
|
21 650
|
12
|
Adjusted
EBITDA1 (R million)
|
31
803
|
18 608
|
71
|
Headline earnings (R
million)
|
9
499
|
11 858
|
(20)
|
Basic earnings per
share (Rand)
|
23,98
|
23,41
|
2
|
Headline earnings per
share (Rand)
|
15,21
|
19,16
|
(21)
|
Core headline earnings
per share2 (Rand)
|
22,52
|
7,86
|
>100
|
Dividend per share
(Rand)
|
|
|
|
- Interim
(Rand)
|
-
|
-
|
-
|
- Final
(Rand)
|
-
|
-
|
-
|
1Adjusted EBITDA
is calculated by adjusting EBIT for depreciation, amortisation,
share-based payments, remeasurement items, change in discount rates
of environmental provisions, all unrealised translation gains and
losses, and all unrealised gains and losses on our derivatives and
hedging activities. We believe Adjusted EBITDA is a useful measure
of the Group's underlying cash flow performance. However, this is
not a defined term under IFRS and may not be comparable with
similarly titled measures reported by other companies. (Adjusted
EBITDA constitutes pro forma financial information in terms of the
JSE Limited Listings Requirements and should be read in conjunction
with the basis of preparation and pro forma financial information
notes as set out in the full set of reviewed interim financial
results.)
|
2Core HEPS is
calculated by adjusting headline earnings per share with
non-recurring items, earnings losses of significant capital
projects (exceeding R4 billion) which have reached beneficial
operation and are still ramping up, all translation gains and
losses (realised and unrealised), all gains and losses on our
derivatives and hedging activities (realised and unrealised), and
share-based payments on implementation of B-BBEE transactions.
Adjustments in relation to the valuation of our derivatives at
period end are to remove volatility from earnings as these
instruments are valued using forward curves and other market
factors at the reporting date and could vary from period to period.
We believe core headline earnings are a useful measure of the
Group´s sustainable operating performance. (Core HEPS constitutes
pro forma financial information in terms of the JSE Limited
Listings Requirements and should be read in conjunction with the
basis of preparation and pro forma financial information notes as
set out in the full set of reviewed interim financial
results.)
|
Turnover
|
|
EBIT/(LBIT)
|
Half
year
|
Half
year
|
|
Half
year
|
Half
year
|
31 Dec
20
|
31 Dec
21
|
|
31 Dec
21
|
31 Dec
20
|
R
million
|
R
million
|
|
R
million
|
R
million
|
|
|
Energy
business
|
|
|
10 807
|
11
872
|
Mining
|
2
026
|
1 732
|
6 280
|
5
683
|
Gas
|
7
619
|
4 155
|
27 151
|
41
439
|
Fuels
|
5
730
|
1 457
|
|
|
Chemicals
business
|
|
|
28 312
|
30
819
|
Africa
|
10
567
|
5 283
|
12 070
|
18
133
|
America
|
1
396
|
(837)
|
21 205
|
26
087
|
Eurasia
|
2
346
|
1 538
|
6
|
32
|
Corporate
Centre
|
(5
375)
|
8 322
|
105
831
|
134
065
|
Group
performance
|
24
309
|
21 650
|
(13 863)
|
(14
154)
|
Intersegmental
turnover
|
|
91 968
|
119
911
|
External
turnover
|
|
Net asset
value
|
Half
year
31 Dec
2021
|
Full
year
30 Jun
2021
|
Change
%
|
Total assets (R
million)
|
394 156
|
360 743
|
9
|
Total liabilities (R
million)
|
221 583
|
208 272
|
(6)
|
Total equity (R
million)
|
172
573
|
152
471
|
13
|
Balance sheet management
Cash generated by operating activities increased by 73% to R20,3
billion compared to the prior period. Actual capital expenditure
amounted to R10,4 billion compared to R7,5 billion during the prior
period. The higher capital expenditure is due largely to the
absence of a phased shutdown at SO in the prior period and
increased sustenance capital expenditure in the current period.
Our net debt to EBITDA ratio at 31
December 2021, based on the revolving credit facility (RCF)
and US dollar term loan covenant definition, was 1,3 times,
significantly below the threshold level of 3 times. Sasol is
committed to continue with its efforts to reduce leverage and
absolute debt levels.
At 31 December 2021, our total
debt was R109,2 billion compared to R102,9 billion at
30 June 2021. During this reporting period we repaid a
portion of the RCF, however the weakened closing Rand/US Dollar
exchange rate had a translation effect of R11,7 billion on our
debt.
Gearing has reduced to 59,1% at 31
December 2021 from 61,5% at 30 June
2021. This is mainly due to stronger cash earnings
generation, offset by the weaker closing exchange rate.
As at 31 December 2021, our
liquidity headroom was R91 billion (US$5,7
billion), well above our outlook to maintain liquidity in
excess of US$1 billion. We will repay
the outstanding debt on the Commercial Paper (R2,2 billion) and a
US$1 billion bond (R16 billion) in
August 2022 and November 2022 respectively.
In line with our financial risk management framework, we
continue to make good progress with hedging our foreign currency,
crude oil and ethane exposure. We have been successful in hedging
our total exposure for 2022 and we are making good progress with
hedging our 2023 exposure, which increases the certainty of future
cash flows and mitigates downside risk to enable our Future Sasol
strategy. For further details of our open hedge positions we refer
you to our Analyst Book (www.sasol.com).
Dividend
The restoration of dividends is a key priority, however, in
the context of the high level of macroeconomic uncertainty the
Board believes it is prudent not to declare an interim dividend at
this stage. This is in line with the capital allocation framework
and dividend triggers which were communicated at our Capital
Markets Day in September
2021.
Director changes
Mr Z M Mkhize and Mr P J Robertson retired as non-executive
directors of Sasol Limited at the end of the annual general meeting
held on 19 November 2021.
Management changes: Appointment of Executive Vice Presidents
for Mining and Energy Operations
The board also approved the appointment of Mr Riaan Rademan as Executive Vice President (EVP)
for Mining and as a member of the Group Executive Committee,
effective 9 March 2022. Riaan's
mandate is to lead mining through its current challenges and
position the business over the coming months for enhanced and
sustainable productivity, prioritising safety in our
operations.
Riaan re-joins Sasol from Foskor (Pty) Ltd where he has been the
President and Chief Executive Officer since 1 July 2019 and led a successful business
turnaround programme. He previously had a 36-year career with Sasol
up to 30 September 2017. During his tenure with the company
he held executive accountability for several key businesses and
functions, including mining and exploration and production, shared
services, information management, procurement, and supply
chain.
In addition, our EVP Energy Operations, Mr Bernard Klingenberg nears retirement later this
year and a suitable internal successor was identified. Mr
Simon Baloyi will be appointed as
the EVP Energy Operations, effective 1 April
2022. He holds masters degrees in chemical engineering and
engineering management, and has more than 20 years' experience
across the Sasol South African value chains.
Mr Grobler, Sasol's President and CEO said: "I am confident that
these executive changes will strengthen the business and support
our drive to further embed safety and operational discipline across
the portfolio. I would also like to thank Mr Bernard Klingenberg for his contribution and
leadership during his 36 year tenure at Sasol and we will pay
tribute to him nearer to his retirement."
Short-form statement
This announcement is the responsibility of the directors. The
information in this short-form announcement, including the
financial information on which the outlook is based, has not been
reviewed and reported on by Sasol Limited's external auditors.
Sasol's independent auditor, PricewaterhouseCoopers Incorporated
(PwC), reported a reportable irregularity (RI), but has concluded
that it is no longer continuing and has expressed an unmodified
review opinion on the condensed consolidated interim financial
statements for the six months ended 31
December 2021. The RI had no impact on the interim financial
results for the period. The RI pertained to energy production
volume forecasts and further details on the RI can be found in the
full announcement.
Financial figures in this announcement have been correctly
extracted from the reviewed interim financial results. This
announcement does not include the information required pursuant to
paragraph 16A(j) of IAS 34 'Interim Financial Reporting. It is only
a summary of the information contained in the full announcement and
does not contain full or complete details. Any investment decision
should also take into consideration the information contained in
the full announcement, published on SENS on 21 February 2022, via the JSE link. The full
announcement and the reviewed interim financial results will be
available on the Company's website at
https://www.sasol.com/investor-centre/financial-reporting/financial-reports-2022
https://www.sasol.com/investor-centre/financial-reporting/annual-integrated-reporting-set.
The pre-recorded presentation will be available on the following
link:
https://www.corpcam.com/Sasol21022022
The JSE link is as follows:
https://senspdf.jse.co.za/documents/2022/JSE/ISSE/SOL/HY22Result.pdf
The President and Chief Executive Officer and Chief Financial
Officer will host a conference call on Monday, 21 February 2022 via webcast at 15h00 (SA) to
discuss the results and give an update of the business.
Live conference call link:
https://www.corpcam.com/Sasol21022022Q
For further information, please contact:
Sasol Investor Relations,
Tiffany Sydow, Investor Relations
Officer
Telephone: +27 (0) 71 673 1929
investor.relations@sasol.com
Disclaimer - Forward-looking statements
Sasol may, in this document, make certain statements that are
not historical facts and relate to analyses and other information
which are based on forecasts of future results and estimates of
amounts not yet determinable. These statements may also relate to
our future prospects, expectations, developments and business
strategies. Examples of such forward-looking statements include,
but are not limited to, the impact of the novel coronavirus
(COVID-19) pandemic, and measures taken in response, on Sasol's
business, results of operations, markets, employees, financial
condition and liquidity; the effectiveness of any actions taken by
Sasol to address or limit any impact of COVID-19 on its business;
the capital cost of our projects and the timing of project
milestones; our ability to obtain financing to meet the funding
requirements of our capital investment programme, as well as to
fund our ongoing business activities and to pay dividends;
statements regarding our future results of operations and financial
condition, and regarding future economic performance including cost
containment, cash conservation programmes and business optimisation
initiatives; recent and proposed accounting pronouncements
and their impact on our future results of operations and financial
condition; our business strategy, performance outlook, plans,
objectives or goals; statements regarding future competition,
volume growth and changes in market share in the industries and
markets for our products; our existing or anticipated investments,
acquisitions of new businesses or the disposal of existing
businesses, including estimates or projection of internal rates of
return and future profitability; our estimated oil, gas and coal
reserves; the probable future outcome of litigation, legislative,
regulatory and fiscal developments, including statements regarding
our ability to comply with future laws and regulations; future
fluctuations in refining margins and crude oil, natural gas and
petroleum and chemical product prices; the demand, pricing and
cyclicality of oil, gas and petrochemical product prices; changes
in the fuel and gas pricing mechanisms in South Africa and their effects on prices, our
operating results and profitability; statements regarding future
fluctuations in exchange and interest rates and changes in credit
ratings; total shareholder return; our current or future products
and anticipated customer demand for these products; assumptions
relating to macroeconomics; climate change impacts and our climate
change strategies, our development of sustainability within our
Energy and Chemicals Businesses, our energy efficiency improvement,
carbon and GHG emission reduction targets, our net zero
carbon emissions ambition and future low-carbon initiatives,
including relating to green hydrogen and sustainable aviation fuel;
our estimated carbon tax liability; cyber security; and statements
of assumptions underlying such statements. Words such as "believe",
"anticipate", "expect", "intend", "seek", "will", "plan", "could",
"may", "endeavour", "target", "forecast" and "project" and similar
expressions are intended to identify such forward-looking
statements, but are not the exclusive means of identifying such
statements. By their very nature, forward-looking statements
involve inherent risks and uncertainties, both general and
specific, and there are risks that the predictions, forecasts,
projections and other forward-looking statements will not be
achieved. If one or more of these risks materialise, or should
underlying assumptions prove incorrect, our actual results may
differ materially from those anticipated. You should understand
that a number of important factors could cause actual results to
differ materially from the plans, objectives, expectations,
estimates and intentions expressed in such forward-looking
statements. These factors and others are discussed more fully in
our most recent annual report on Form 20-F filed on 22 September 2021 and in other filings with the
United States Securities and Exchange Commission. The list of
factors discussed therein is not exhaustive; when relying on
forward-looking statements to make investment decisions, you should
carefully consider foregoing factors and other uncertainties and
events, and you should not place undue reliance on forward-looking
statements. Forward-looking statements apply only as of the date on
which they are made, and we do not undertake any obligation to
update or revise any of them, whether as a result of new
information, future events or otherwise.
Please note: One billion is defined as one thousand
million, bbl – barrel, bscf – billion standard cubic feet, mmscf –
million standard cubic feet, oil references brent crude, mmboe –
million barrels oil equivalent. All references to years refer to
the financial year ended 30 June. Any reference to a calendar year
is prefaced by the word "calendar".
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SOURCE Sasol Limited