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SOL - Sasol Limited - Financial results for the year ended 30 June 2011
Sasol Limited
(Incorporated in the Republic of South Africa)
(Registration number 1979/003231/06)
Sasol Ordinary Share codes: JSE : SOL NYSE : SSL
Sasol Ordinary ISIN codes: ZAE000006896 US8038663006
Sasol BEE Ordinary Share code: JSE : SOLBE1
Sasol BEE Ordinary ISIN code: ZAE000151817
("Sasol")
SASOL LIMITED FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2011
Delivering on growth and value
Driven by innovation, Sasol is an integrated energy and chemicals company that
creates value through its proven alternative fuel technology and talented people
to provide sustainable energy solutions to the world
Headline earnings per share increased by 27% to R33,85
Total dividend increased by 24% to R13,00 per share
Cash generated by operations increased by 41% to R38,6 billion
Project pipeline progressing well
Canadian shale gas acquisitions add significantly to long-term value growth
Sasol successfully pioneers first BEE listing on JSE
Segment report
for the year ended 30 June
Turnover Business unit Operating profit
R million analysis R million
2010 2011 2011 2010
95 538 106 860 South African energy cluster 19 947 17 808
7 863 9 146 Mining 1 063 815
5 371 5 445 Gas 2 578 2 479
33 893 37 485 Synfuels 15 188 13 175
48 411 54 784 Oil 1 180 1 364
- - Other (62) (25)
3 967 5 872 International energy 1 587 468
cluster
2 282 3 715 Synfuels International 1 205 131
1 685 2 157 Petroleum International 382 337
71 577 82 854 Chemical cluster 8 712 5 496
14 321 17 082 Polymers 1 579 958
15 765 17 280 Solvents 1 655 1 154
25 283 31 715 Olefins & Surfactants 4 161 2 492
16 208 16 777 Other chemical businesses 1 317 892
6 043 Other businesses (296) 165
5 420
176 502 201 629 29 950 23 937
(54 246) (59 193) Intercompany turnover
122 256 142 436
Overview
Chief executive, David Constable, says:
"We have continued to deliver on our strategy in the past financial year. Our
focus on further improving the performance of our assets has delivered strong
production, cost and margin benefits. We also made significant strides in
pursuing responsible growth, both in South Africa, as well as abroad. We are
particularly pleased with our acquisition of two shale gas assets in Canada and
are making progress on this and other gas-to-liquids opportunities, based on our
proprietary technology."
Earnings attributable to shareholders for the year ended 30 June 2011 increased
by 24% to R19,8 billion from R15,9 billion in the prior year, while headline
earnings per share and earnings per share increased by 27% to R33,85 and by 24%
to R32,97, respectively, over the same period.
Operating profit of R30 billion increased by 25% compared with the prior year,
due to decisive actions taken by management around energy efficiency initiatives
as well as our continued focus on cost containment and the benefits realised
from our functional excellence programme and business improvement plans. In
addition, operating profit was positively impacted by higher average crude oil
prices (average dated Brent was US$96,48/barrel in 2011 compared with
US$74,37/barrel in 2010) and higher chemical product prices. The benefits of the
higher average crude oil and chemical product prices were partially offset by an
8% stronger average rand/US dollar exchange rate (R7,01/US$ in 2011 compared
with R7,59/US$ in 2010). Overall, group production volumes improved marginally
from the prior year, despite Synfuels` major planned maintenance outage. Group
cash fixed costs for the year were contained within inflation, excluding once-
off charges and growth costs.
The operating profit in the current year was negatively impacted by once-off
charges totalling R1 103 million (2010: R46 million credit). These once-off
charges include competition related administrative penalties of R112 million,
the Escravos gas-to-liquids (EGTL) partial impairment of R123 million and the
share-based payment expense of R565 million resulting from the Ixia Coal BEE
transaction, offset by the reversal of the remaining impairment related to Sasol
Olefins and Surfactants (O&S) Italy of R491 million. The current year also
includes a Sasol Inzalo BEE share based payment expense of R830 million compared
with R824 million in the prior year.
The increase in the effective tax rate from 29,9% to 31,3% resulted from the
competition related administrative penalties and share-based payment expenses,
both of which are not deductible for tax purposes.
Cash flow generated by operating activities was R38,6 billion compared with
R27,3 billion in the prior year. This was mainly due to increased operating
profits and reduced working capital, both as a result of price and volume
effects. The group made good progress on growth projects as reflected in capital
expenditure of R20,7 billion for the year in addition to the cash consideration
of R3,8 billion related to the Canada shale gas asset acquisitions.
Chief financial officer, Christine Ramon says:
"Decisive management actions on operational efficiencies, cost control and
business improvement plans have boosted the bottom line this year. Higher global
commodity prices have supported the healthy margins delivered, particularly in
our chemicals businesses, negating the impact of the strong rand. The global
economy remains volatile and our strong cash flows continue to underpin the
robustness of our businesses. Our strong balance sheet provides a buffer against
volatility and positions the company well to fund growth opportunities, with the
aim of enhancing long-term shareholder value."
Striving for strategic and sustainable growth
In order to ensure that our strategic growth objectives are achieved and build
on the solid foundation of our existing businesses, we will continue to focus on
specific initiatives which will contribute to achieving and delivering on
stakeholder value. All our businesses and functions will continue to operate
sustainably underpinned by sound governance. This will be achieved through
improving our operational excellence and delivering further value on our
functional excellence initiatives, which were implemented two years ago. These
initiatives will support our commitment to energy efficiency and our
environmental projects. In addition, we will establish and roll-out our sales
and marketing excellence initiative across the group to support our customer
focus. We will continue to focus on improving our safety performance striving
for zero harm to all our stakeholders. The aforementioned actions will enable us
to pursue our growth drivers, including growing our upstream gas resources,
accelerating our GTL developments and ramping up our new energy business. Our
growth will be supported by our capital excellence programme, which aims to
enhance long-term shareholder returns.
We have paid R25,4 billion direct and indirect taxes to the South African
government. This makes Sasol one of the largest corporate taxpayers in South
Africa, contributing significantly to the South African economy.
We contribute about 5% of South Africa`s gross domestic product (GDP), directly
and indirectly. We employ approximately 34 000 people globally, of which 80% are
in South Africa, and create about 200 000 additional indirect jobs.
During the year, the following noteworthy milestones were achieved:
In July 2010, we concluded an agreement with Gassnova SF, a Norwegian state-
owned enterprise. This agreement allows us to participate in the European CO2
Technology Centre Mongstad, which is currently constructing a carbon capture
facility in Norway. Construction is progressing and the facility is scheduled
for start-up in the latter half of 2012.
Sasol New Energy has undertaken studies related to various clean energy and low
carbon electricity initiatives, including the generation of electricity from
natural gas in both South Africa and Mozambique and the establishment of
concentrated solar power facilities to produce electricity in South Africa.
In September 2010, we concluded the Ixia Coal transaction in line with Sasol
Mining`s empowerment strategy and its commitment to comply with the objectives
of the South African Mineral and Petroleum Resources Development Act and the
Mining Charter. This transaction results in Ixia Coal Funding (Pty) Ltd, a
subsidiary of Ixia Coal (Pty) Ltd, acquiring a 20% shareholding in Sasol Mining
(Pty) Ltd for a purchase consideration of R1,8 billion.
The recordable case rate (RCR) for employees and service providers, including
injuries and illnesses, improved to a record low of 0,42 at 30 June 2011 from
0,51 at 30 June 2010. However, we have experienced an increase in fatalities.
Our revised safety improvement plan is currently being implemented to address
this matter.
In February 2011, we listed the Sasol BEE ordinary shares on the BEE segment of
the Johannesburg Stock Exchange. This pioneering trading facility provides many
new Sasol shareholders access to a regulated market in line with our commitment
to broad-based shareholder development.
Acquisitions and projects progressing
Projects and gas asset acquisitions in support of our GTL value proposition are
advancing, supported by our strong cash flow generation and balance sheet, which
provides a solid platform for growth:
Progress has been made in the following areas related to the advancement and
acquisition of natural gas assets in support of leveraging GTL technology:
- In December 2010, Sasol acquired a 50% stake in the Farrell Creek shale gas
assets of Talisman Energy Inc. (Talisman), a Canadian-based company, located in
the Montney Basin, of British Columbia, Canada, for an amount of R7,1 billion.
In March 2011, Sasol further acquired a 50% stake in Talisman`s Cypress A shale
gas assets for an amount of R7,1 billion on similar terms. The acquired assets
also include associated gas gathering systems and processing facilities.
- During 2011, Sasol Petroleum International (SPI) increased its exploration and
appraisal activities in Mozambique, Australia and Papua New Guinea. Further
explorations and evaluation activities in these areas is ongoing.
During 2011, Sasol New Energy obtained approval from the Sasol board to
construct a 140 megawatt electricity generation plant in Sasolburg, South
Africa. The plant will utilise natural gas as its feedstock.
During 2011, a pre-feasibility study into an integrated GTL and chemicals
facility in the United States was concluded. After the successful completion of
the pre-feasibility study, the Sasol board has approved that the project proceed
to feasibility study phase.
During the year, we commenced with a feasibility study to determine the
technical and commercial viability of a GTL plant in western Canada, following
our recent shale gas acquisitions in the area.
The feasibility study for the Uzbekistan GTL plant has been completed. The
decision to proceed to front end engineering and design (FEED) will be taken in
the near term and is dependent upon certain commercial conditions.
Given the delay in the approval from the Chinese government for our CTL project
in China, we are developing other investment strategies and growth
opportunities, both in South Africa and abroad. We have reallocated planned
project funding for the China CTL project and redeployed staff to other
projects. We remain committed to growing our other businesses in China.
The pre-feasibility study in respect of our Indian coal-to-liquids (CTL)
project has largely been concluded. As the last phase of the study, a drilling
programme is being undertaken to verify the coal assumptions.
Sasol Mining is nearing completion of the Thubelisha shaft which will supply
both the export market and sustain Sasol Synfuels` production. The shaft is
expected to be completed in 2012. Construction on the Impumelelo colliery
remains on track for completion in 2014.
Construction on the wax production facility in Sasolburg, South Africa,
continues to progress according to plan.
Climate change being addressed
Sasol agrees that climate change presents a risk to the world at large, to South
Africa and to the local and international business community. We are committed
to transitioning to a low carbon and climate resilient economy and are actively
engaging with the South African government in its development of national
policy. This policy is aimed at ensuring a coordinated, coherent, efficient and
effective response to this challenge, without prejudicing the country`s growth
and development goals and the competitiveness of key industries within the South
African economy.
We are a significant contributor to the South African economy and play a key
role in ensuring energy security for the country; however, we also recognise
that we are a large emitter of greenhouse gases (GHG). We have made changes to
how we operate our business in order to transition to a lower carbon economy.
Through investments in energy efficiency and in finding and using natural gas
from Mozambique, Sasol reduced annual GHG emissions levels by 10 million tonnes
between 2004 and 2011, a reduction of 12%.
Performance from existing operations delivers results
South African energy cluster
Sasol Mining - higher coal prices
Operating profit of R1 628 million, excluding the once-off Ixia Coal transaction
share-based payment expense of R565 million, doubled compared with the prior
year. Higher US dollar export coal prices contributed to the increase in
operating profit despite the impact of the Sasol Synfuels` maintenance outage.
This positive contribution, however, was partially offset by a stronger rand/US
dollar exchange rate.
Sasol Gas - improved sales volumes
Operating profit increased by 4% to R2 578 million compared with the prior year
mainly as a result of improved sales volumes, despite lower gas prices due to
the stronger rand/US dollar exchange rate. The increase in operating profit was
partially offset by start-up costs in respect of a new compressor in Mozambique,
which supported the increased sales volumes.
Sasol Synfuels - major planned maintenance outage impacts production volumes
Sasol Synfuels` operating profit increased by 15% to R15 188 million compared
with the prior year. Production volumes were 4% lower than the prior year
primarily due to the largest planned maintenance outage in Sasol Synfuels`
history. Operating profits were enhanced by higher average oil prices. The open
cycle gas turbines were successfully commissioned during July 2010, making
available an additional 200 megawatts of electricity generation capacity for the
Sasol Synfuels operations, thereby significantly reducing the impact of above
inflation electricity price increases on Sasol Synfuels` unit cost. Sasol
Synfuels` cash fixed cost per unit increase was contained to 4%.
Sasol Oil - improved production
Operating profit decreased by 13% to R1 180 million compared with the prior
year. Higher retail and commercial sales volumes were supported by increased
production from the Natref refinery. Higher wholesale margins were, however,
countered by the strong rand as well as weaker refining margins. Eight new
retail convenience centres were opened during the year.
International energy cluster
Sasol Synfuels International (SSI) - Oryx GTL improved production
SSI`s operating profit increased significantly to R1 205 million from R131
million in the prior year. This was mainly due to increased production at the
Oryx gas-to-liquids (GTL) plant in Qatar and higher product prices derived from
crude oil prices, which were partially offset by a stronger rand/US dollar
exchange rate. The Oryx GTL plant is producing well and achieved an 82%
utilisation rate for the year.
Sasol Petroleum International (SPI) - higher oil and gas prices, improved
volumes
Operating profit increased by 13% to R382 million compared with the prior year,
mainly due to higher sales volumes resulting from increased production. The
increase was further underpinned by higher oil and gas prices. Exploration
expenditure was higher during the year. Work on the expansion of the onshore gas
production facilities in Pande and Temane, Mozambique, to increase the current
annual production capacity from 120 million gigajoules to 183 million
gigajoules, is nearing completion. Production from our Canadian operation is
ramping up.
Chemical cluster
Sasol Polymers - improved volume and prices
Sasol Polymers operating profit of R1 579 million increased by 65% compared with
the prior year. Operating profit was positively impacted by increases in
production volumes from our local and offshore operations. The increase in
operating profit was softened by margin pressure in the international polymer
industry and was partially offset by the stronger rand/US dollar exchange rate.
Arya Sasol Polymer Company (ASPC) contributed positively with an average
capacity utilisation of 80% for the year. Our local operation`s results included
the negative impact of a once-off administrative penalty of R112 million paid to
the South African Competition Commission (the Commission).
Sasol Solvents - higher product prices result in higher margins
Operating profit increased by 43% to R1 655 million compared with the prior
year. The increase is mainly due to improved margins, resulting from higher
prevailing product prices coupled with cost savings. The increased operating
profit was, however, partially offset by reduced sales volumes due to scheduled
outages at production facilities as well as the negative effect of the strong
rand.
Sasol Olefins & Surfactants (Sasol O&S) - improved demand, margin expansion
Operating profit increased by 67% to R4 161 million compared with the prior
year, mainly as a result of robust demand in most of the Sasol O&S markets as
well as improved margins across the Sasol O&S product portfolio. The increase in
operating profit from our foreign operations was partially offset by foreign
currency translation effects. The 2011 financial year includes the reversal of
the remainder of the impairment related to Sasol O&S Italy assets amounting to
R491 million.
Other chemical businesses - improved sales volumes
Operating profit increased by 48% to R1 317 million compared with the prior
year. Global sales volumes of the wax markets as well as the explosives and
ammonia markets in Southern Africa improved on the back of increased demand.
Lower fertiliser sales volumes were experienced due to the impacts associated
with the required exit of retail sales. Improved margins underpinned higher
operating profits which were partially offset by the stronger rand. Cost control
and restructuring have remained a key focus area for our other chemical
businesses.
Competition law compliance
We are continuously evaluating and enhancing our compliance programmes and
controls in general, and our competition law compliance programme and controls
in particular. As a consequence of these compliance programmes and controls,
including monitoring and review activities, we have also adopted appropriate
remedial and/or mitigating steps, where necessary or advisable, lodged leniency
applications and made disclosures on material findings as and when appropriate.
As reported previously, these compliance activities have already revealed, and
the implementation of certain close-out actions arising there from, may still
reveal competition law contraventions or potential contraventions in respect of
which we have taken, or will take, appropriate remedial and/or mitigating steps
including lodging leniency applications.
The Commission is conducting investigations into the South African piped gas,
coal mining, petroleum, fertilisers and polymer industries. We continue to
interact and co-operate with the Commission in respect of the subject matter of
current leniency applications brought by Sasol, conditional leniency agreements
concluded with the Commission, as well as in the areas that are subject to the
Commission`s investigations. To the extent appropriate further announcements
will be made in future.
Due to the uncertainty related to these matters, it is currently not possible to
estimate contingent liabilities, if any, and accordingly no provision has been
recognised at 30 June 2011.
Balance sheet remains strong
Balance sheet gearing at 30 June 2011 of 1,3% (30 June 2010: 1,0%) remained low
as a result of improved cash flow generation. This low level of gearing is
expected to be maintained in the short-term, but is likely to return to within
our targeted range of 20% to 40% in the medium term as our large capital
intensive growth programme and gas acquisition strategy gains momentum. At the
annual general meeting of 26 November 2010, shareholders granted the Sasol
directors authority to buy back up to 10% of Sasol`s issued share capital
(excluding the preferred ordinary and Sasol BEE ordinary shares) for a further
12 months. No shares were repurchased during the current year.
Profit outlook* - uncertain macro environment, focus on improved operational
performance and cost control
The past financial year has seen a global recovery from the economic crisis,
although some economies are proceeding at a slower pace. Downside risks remain
with high funding requirements of banks and sovereign states. However, product
prices and the demand for chemical products have shown significant improvement.
Crude oil prices remained volatile but have increased steadily as a result of
the political turmoil in the Middle East and North Africa and disruptions to
supply. These increased prices have assisted with offsetting the negative impact
of the strong rand. The strengthening of the rand/US dollar exchange rate
remains the single biggest external factor exerting pressure on our
profitability.
We anticipate that Sasol Synfuels` production volumes will improve to between
7,2 million tons (mt) and 7,3 mt in 2012 following the major planned maintenance
outage which was undertaken in September 2010. Oryx GTL is expected to perform
at its planned operating rate of 80% to 90% of design capacity and Arya is
expected to improve as it ramps up to design capacity utilisation rate. We
expect improved volumes from Mozambique and Canada. Our focus in the year ahead
remains on factors within our control: volume growth, margin improvement and
cost containment. These focus areas will be underpinned by our group-wide
initiatives on operations excellence, functional excellence and capital
excellence. We are also enhancing the extraction of value across our integrated
operations through planning and optimisation and have introduced the sales and
marketing excellence initiative. We remain on track to deliver on our
expectations for an improved operational performance and to contain cost
increases to within inflation. Given the continuing uncertain macro economic
conditions and our assumptions in respect of improved crude oil and product
prices, as well as the strong rand/US dollar exchange rate, it is difficult to
be more precise in this outlook statement.
Management has recommended and the board has approved the final dividend taking
into account the ongoing strength of our financial position and current capital
investment plans, as well as the increased earnings. This approach is in line
with our progressive dividend policy and our commitment to return value to
shareholders.
* In accordance with standard practice, it is noted that this information has
not been reviewed or reported on by the company`s auditors.
Acquisitions and disposals of businesses
In September 2010, we concluded the Ixia Coal transaction. This transaction
results in Ixia Coal Funding (Pty) Ltd, a subsidiary of Ixia Coal (Pty) Ltd,
acquiring a 20% shareholding in Sasol Mining (Pty) Ltd for a purchase
consideration of R1,8 billion. The transaction resulted in a non-controlling
interest of an effective 10,2% being recognised.
On 1 March 2011 and 10 June 2011, we concluded the acquisitions of the Farrell
Creek and Cypress A shale gas assets, respectively, in Canada for a total
purchase consideration of R14,2 billion. Of this consideration R3,8 billion was
paid in cash, while the remaining purchase consideration will be settled through
a capital carry mechanism.
Changes of directors and company secretary
On 26 November 2010, Mr A Jain retired as a non-executive director of Sasol
Limited. On 1 January 2011, Messrs BP Connellan and TA Wixley retired as non-
executive directors of Sasol Limited. On 1 April 2011, Mr GA Lewin resigned as a
non-executive director of Sasol Limited.
On 30 June 2011, Mr LPA Davies retired as an executive director and chief
executive of Sasol Limited after 36 years of service to the company. The board
wishes to thank Mr LPA Davies for his valuable contribution and the foundation
laid for sustainable growth.
Mr DE Constable was appointed as an executive director and chief executive of
Sasol Limited with effect from 1 July 2011.
The company secretary, Dr NL Joubert, resigned as company secretary and has been
appointed as the country president of Sasol Canada. Mr VD Kahla was appointed as
company secretary with effect from 14 March 2011.
Declaration of cash dividend number 64
A final cash dividend of South African R9,90 per ordinary share (2010: R7,70 per
share) has been declared for the year ended 30 June 2011. The final cash
dividend is payable on all ordinary shares (including the Sasol BEE ordinary
shares), excluding the Sasol preferred ordinary shares.
The salient dates for holders of ordinary shares are:
Last day for trading to qualify for and Friday, 7 October 2011
participate in the final dividend (cum
dividend)
Trading ex dividend commences Monday, 10 October 2011
Record date Friday, 14 October 2011
Dividend payment date Monday, 17 October 2011
Holders of American Depositary Receipts*
Ex dividend on New York Stock Exchange Wednesday, 12 October
2011
Record date Friday, 14 October 2011
Approximate date for currency conversion Tuesday, 18 October 2011
Approximate dividend payment date Friday, 28 October 2011
* All dates are approximate as the NYSE sets the record date after receipt of
the dividend declaration.
On Monday, 17 October 2011, dividends due to certificated shareholders on the
South African registry will either be electronically transferred to
shareholders` bank accounts or, in the absence of suitable mandates, dividend
cheques will be posted to such shareholders. Shareholders who hold
dematerialised shares will have their accounts held by their CSDP or broker
credited on Monday, 17 October 2011.
Share certificates may not be dematerialised or re-materialised between Monday,
10 October 2011 and Friday, 14 October 2011, both days inclusive.
On behalf of the board
Mrs Hixonia Nyasulu Mr David Mrs Christine Ramon
Constable
Chairman Chief executive Chief financial officer
Sasol Limited
9 September 2011
The preliminary financial statements are presented on a
summarised consolidated basis.
Statement of financial position
at 30 June
2011 2010
Rm Rm
Assets
Property, plant and equipment 79 245 72 523
Assets under construction 29 752 21 018
Goodwill 747 738
Other intangible assets 1 265 1 193
Investments in associates 3 071 3 573
Post-retirement benefit assets 792 789
Deferred tax assets 1 101 1 099
Other long-term assets 2 218 1 828
Non-current assets 118 191 102 761
Assets held for sale 54 16
Inventories 18 512 16 472
Trade and other receivables 23 174 20 474
Short-term financial assets 22 50
Cash restricted for use 3 303 1 841
Cash 14 716 14 870
Current assets 59 781 53 723
Total assets 177 972 156 484
Equity and liabilities
Shareholders` equity 107 649 94 730
Non-controlling interest 2 691 2 512
Total equity 110 340 97 242
Long-term debt 14 356 14 111
Long-term financial liabilities 103 75
Long-term provisions 8 233 7 013
Post-retirement benefit obligations 4 896 4 495
Long-term deferred income 498 273
Deferred tax liabilities 12 272 10 406
Non-current liabilities 40 358 36 373
Liabilities in disposal groups held for - 4
sale
Short-term debt 1 602 1 542
Short-term financial liabilities 136 357
Other current liabilities 25 327 20 847
Bank overdraft 209 119
Current liabilities 27 274 22 869
Total equity and liabilities 177 972 156 484
Income statement
for the year ended 30 June
2011 2010
Rm Rm
Turnover 142 436 122 256
Cost of sales and services rendered (90 467) (79 183)
Gross profit 51 969 43 073
Other operating income 1 088 854
Marketing and distribution expenditure (6 796) (6 496)
Administrative expenditure (9 887) (9 451)
Other operating expenditure (6 424) (4 043)
Competition related administrative (112) -
penalties
Effect of crude oil hedges (118) (87)
Share-based payment expenses (2 071) (943)
Effect of remeasurement items (426) 46
Translation losses (1 016) (1 007)
Other expenditure (2 681) (2 052)
Operating profit 29 950 23 937
Finance income 991 1 332
Share of profits of associates (net of 292 217
tax)
Finance expenses (1 817) (2 114)
Profit before tax 29 416 23 372
Taxation (9 196) (6 985)
Profit for the year 20 220 16 387
Attributable to
Owners of Sasol Limited 19 794 15 941
Non-controlling interest in 426 446
subsidiaries
20 220 16 387
Earnings per share Rand Rand
Basic earnings per share 32,97 26,68
Diluted earnings per share1 32,85 26,54
1 Diluted earnings per share are calculated taking the Sasol
Share Incentive Scheme and Sasol Inzalo share transaction into
account.
Statement of cash flows
for the year ended 30 June
2011 2010
Rm Rm
Cash receipts from customers 138 955 118 129
Cash paid to suppliers and employees (100 316) (90 791)
Cash generated by operating activities 38 639 27 338
Finance income received 1 380 1 372
Finance expenses paid (898) (1 781)
Tax paid (6 691) (6 040)
Dividends paid (6 614) (5 360)
Cash retained from operating activities 25 816 15 529
Additions to non-current assets (20 665) (16 108)
Acquisition of interests in joint (3 823) -
ventures
Disposal of businesses 22 -
Additional investments in associate (91) (1 248)
Other net cash flows from investing 92 652
activities
Cash utilised in investing activities (24 465) (16 704)
Share capital issued 430 204
Contributions from non-controlling 27 9
shareholders
Dividends paid to non-controlling (419) (318)
shareholders
Increase/(decrease) in long-term debt 545 (2 567)
Decrease in short-term debt (295) (29)
Cash effect of financing activities 288 (2 701)
Translation effects on cash and cash (421) (124)
equivalents of foreign operations
Increase/(decrease) in cash and cash 1 218 (4 000)
equivalents
Cash and cash equivalents at beginning 16 592 20 592
of year
Cash and cash equivalents at end of 17 810 16 592
year
Statement of comprehensive income
for the year ended 30 June
2011 2010
Rm Rm
Profit for the year 20 220 16 387
Other comprehensive income
Effect of translation of foreign (2 031) (802)
operations
Effect of cash flow hedges 111 13
Investments available-for-sale - 4
Tax on other comprehensive income (23) 8
Other comprehensive income for the year (1 943) (777)
net of tax
Total comprehensive income for the year 18 277 15 610
Attributable to
Owners of Sasol Limited 17 849 15 171
Non-controlling interests in 428 439
subsidiaries
18 277 15 610
Statement of changes in equity
for the year ended 30 June
2011 2010
Rm Rm
Opening balance 97 242 86 217
Shares issued during year 430 204
Share-based payment expenses 1 428 880
Disposal of businesses (4) -
Change in shareholding of subsidiaries - 9
Total comprehensive income for the year 18 277 15 610
Dividends paid (6 614) (5 360)
Dividends paid to non-controlling (419) (318)
shareholders in subsidiaries
Closing balance 110 340 97 242
Comprising
Share capital 27 659 27 229
Share repurchase programme (2 641) (2 641)
Sasol Inzalo share transaction (22 054) (22 054)
Retained earnings 98 590 85 463
Share-based payment reserve 8 024 6 713
Foreign currency translation reserve (1 895) 137
Investment fair value reserve 5 5
Cash flow hedge accounting reserve (39) (122)
Shareholders` equity 107 649 94 730
Non-controlling interest in 2 691 2 512
subsidiaries
Total equity 110 340 97 242
Salient features
for the year ended 30 June
2011 2010
Selected ratios
Return on equity % 19,6 17,9
Return on total assets % 18,7 16,9
Operating margin % 21,0 19,6
Finance expense cover times 34,8 14,3
Dividend cover times 2,5 2,5
Share statistics
Total shares in issue million 671,0 667,7
Treasury shares (share million 8,8 8,8
repurchase programme)
Weighted average number of million 600,4 597,6
shares
Diluted weighted average million 614,5 615,5
number of shares
Share price (closing) Rand 355,98 274,60
Market capitalisation - Sasol Rm 238 863 183 350
ordinary shares
Market capitalisation - Sasol Rm 742 -
BEE ordinary shares
Net asset value per share Rand 179,68 159,00
Dividend per share Rand 13,00 10,50
- interim Rand 3,10 2,80
- final Rand 9,90 7,70
Other financial information
Total debt (including bank
overdraft)
- interest bearing Rm 15 522 15 047
- non-interest bearing Rm 645 725
Finance expense capitalised Rm 43 58
Capital commitments Rm 48 321 46 497
- authorised and contracted Rm 41 367 31 553
- authorised, not yet Rm 33 458 35 769
contracted
- less expenditure to date Rm (26 504) (20 825)
Guarantees and contingent
liabilities
- total amount Rm 31 378 19 120
- liability included in the Rm 11 328 10 288
statement of financial
position
Significant items in operating
profit
- employee costs Rm 18 756 17 546
- depreciation and Rm 7 400 6 712
amortisation of non-current
assets
- share-based payment expenses Rm 2 071 943
Sasol share incentive schemes Rm 676 119
Sasol Inzalo share transaction Rm 830 824
Ixia Coal transaction Rm 565 -
Directors` remuneration Rm 58 59
Share options granted to 000 780 914
directors - cumulative
Share appreciation rights with 000 215 215
no performance targets granted
to directors - cumulative
Share appreciation rights with 000 370 43
performance targets granted to
directors - cumulative
Medium-term incentive rights 000 82 10
granted to directors -
cumulative
Sasol Inzalo share rights 000 50 50
granted to directors -
cumulative
Effective tax rate1 % 31,3 29,9
Number of employees number 33 708 33 054
Average crude oil price - US$/ 96,48 74,37
dated Brent barrel
Average rand/US$ exchange rate 1US$ = 7,01 7,59
Rand
Closing rand/US$ exchange rate 1US$ = 6,77 7,67
Rand
1 Increase in effective tax rate as a
result of competition related
administrative penalties and share-
based payment expenses which are not
deductible for tax.
Rm Rm
Reconciliation of headline
earnings
Profit for the year attributable to 19 794 15 941
owners of Sasol Limited
Effect of remeasurement items 426 (46)
Impairment of assets 171 110
Reversal of impairment (516) (365)
(Profit)/loss on disposal of (9) 5
business
Profit on disposal of (6) (7)
associate
Profit on disposal of assets (14) (3)
Scrapping of non-current 359 156
assets
Write off of unsuccessful 441 58
exploration wells
106 (19)
Tax effects and non-
controlling interests
Headline earnings 20 326 15 876
Remeasurement items per above
Mining 3 1
Gas 6 -
Synfuels 197 58
Oil 17 10
Synfuels International 126 4
Petroleum International 442 108
Polymers 46 14
Solvents 63 58
Olefins & Surfactants (500) (344)
Other chemical businesses (11) 21
(1) 26
Nitro
Wax (3) (5)
Infrachem (8) (1)
Merisol 1 1
37 24
Other businesses
Remeasurement items 426 (46)
Rand 33,85 26,57
Headline earnings per share
Diluted headline earnings per Rand 33,72 26,44
share
The reader is referred to the definitions contained in the 2010
Sasol Limited annual financial statements.
Basis of preparation and accounting policies
The preliminary summarised consolidated financial results for the year ended 30
June 2011 have been prepared in compliance with the Listings Requirements of the
JSE Limited, International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board (in particular International Accounting
Standard 34 Interim Financial Reporting), the AC500 Standards as issued by the
Accounting Practices Board or its successor and the requirements of the South
African Companies Act, 2008, as amended.
The accounting policies applied in the presentation of the preliminary
summarised consolidated financial results are consistent with those applied for
the year ended 30 June 2010, except as follows:
Sasol Limited has early adopted the following standards, which did not have a
significant impact on the financial results:
IAS 1 (Amendment), Presentation of Financial Statements: Severe Hyperinflation.
IAS 1 (Amendment), Presentation of Financial Statements: Presentation of Items
of Other Comprehensive Income.
IAS 12 (Amendment), Taxation: Deferred Tax - Recovery of Underlying Assets.
IFRS 7, Financial Instruments: Disclosures - Transfer of Financial Assets.
IFRS 13, Fair Value Measurement.
Various Improvements to IFRSs.
Sasol has adopted IFRS 2 (Amendment), Share-based Payment: Group Cash-settled
Share-based Payment Transactions and Various Improvements to IFRSs: IAS 27,
Consolidated and Separate Financial Statements, effective 1 January 2010 and 1
July 2010, respectively, which did not have a significant impact on the
financial results.
These preliminary summarised consolidated financial results have been prepared
in accordance with the historic cost convention except that certain items,
including derivative instruments, liabilities for cash-settled share-based
payment schemes and available-for-sale financial assets, are stated at fair
value.
The preliminary summarised consolidated financial results are presented in rand,
which is Sasol Limited`s functional and presentation currency.
Ms Christine Ramon, chief financial officer is responsible for this set of
financial results and has supervised the preparation thereof in conjunction with
the executive: group finance, Mr Freddie Meyer and the general manager: group
statutory reporting, Ms Samantha Barnfather.
Related party transactions
The group, in the ordinary course of business, entered into various sale and
purchase transactions on an arm`s length basis at market rates with related
parties.
Significant changes in contingent liabilities since 30 June 2010
On 12 August 2010, the Commission announced that it had referred its complaints
of excessive pricing of polypropylene and propylene in the domestic South
African market against Sasol Chemical Industries Limited (SCI) and of price
fixing in respect of polypropylene against SCI and Safripol to the Competition
Tribunal for adjudication. On 14 December 2010, Sasol Polymers, a division of
SCI, concluded a settlement agreement with the Commission in relation to its
existing propylene supply agreement with Safripol and agreed to pay a penalty of
R112 million. This penalty has been paid and no further provisions have been
recognised at 30 June 2011 with regards to this matter.
Independent audit by the auditors
The preliminary summarised consolidated statement of financial position at 30
June 2011 and the related preliminary summarised consolidated income statement,
statements of comprehensive income, changes in equity and cash flows for the
year then ended were audited by KPMG Inc. The individual auditor assigned to
perform the audit is Mr CH Basson. Their unmodified audit report is available
for inspection at the registered office of the company.
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,
developments and business strategies. Examples of such forward-looking
statements include, but are not limited to, statements regarding exchange rate
fluctuations, volume growth, increases in market share, total shareholder return
and cost reductions. Words such as "believe", "anticipate", "expect", "intend",
"seek", "will", "plan", "could", "may", "endeavour" 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 are
discussed more fully in our most recent annual report under the Securities
Exchange Act of 1934 on Form 20-F filed on 28 September 2010 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 both
these factors and other uncertainties and events. 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: A billion is defined as one thousand million. All references to
years refer to the financial year ended 30 June. Any reference to a calendar
year is prefaced by the word "calendar".
e-mail: investor.relations@sasol.com
Comprehensive additional information is available on our website:
www.sasol.com
Registered office: Sasol Limited, 1 Sturdee Avenue, Rosebank, Johannesburg 2196.
PO Box 5486, Johannesburg 2000, South Africa
Share registrars: Computershare Investor Services (Pty) Ltd, 70 Marshall Street,
Johannesburg 2001, PO Box 61051, Marshalltown 2107, South Africa Tel: +27 11
370-
7700''Fax: +27 11 370-5271/2
Sponsor: Deutsche Securities (SA) (Pty) Ltd
Directors (non-executive): Ms TH Nyasulu (Chairman), Mr C Beggs*, Mr HG
Dijkgraaf (Dutch)*, Dr MSV Gantsho*, Ms IN Mkhize*, Mr MJN Njeke*, Prof JE
Schrempp (German)
(executive): Mr DE Constable (Chief executive), Ms KC Ramon (Chief financial
officer), Ms VN Fakude
*Independent Lead independent director
Company secretary: Mr VD Kahla
Company registration number: 1979/003231/06, incorporated in the Republic of
South Africa
JSE NYSE
Sasol Ordinary shares
Share code: SOL SSL
ISIN code: ZAE000006896 US8038663006
Sasol BEE Ordinary shares
Share code: SOLBE1
ISIN code: ZAE000151817
American depositary receipts (ADR) program: Cusip number 803866300''ADR to
ordinary share 1:1
Depositary: The Bank of New York Mellon, 22nd floor, 101 Barclay Street, New
York, NY 10286, USA
Date: 12/09/2011 07:05:01 Supplied by www.sharenet.co.za
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