Wrap Text
SOL/ SOLBE1 - Sasol Limited - Sasol Limited reviewed interim financial results
for the six months ended 31 December 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" or "the Company")
Sasol Limited reviewed interim financial results
for the six months ended 31 December 2011
Pursuing sustainable value creation
Driven by innovation, Sasol is an international 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.
* Solid group operational performance
* Operating profit up by 70% to R20,5 billion
* Headline earnings per share up by 81% to R23,50
* Interim dividend up by 84% to R5,70 per share
* Cash generated by operations up by 50% to R22,7 billion
Segment report
for the period ended
Turnover Business unit Operating profit
R million analysis R million
full half half half half full
year year year year year year
30 Jun 31 Dec 31 Dec 31 Dec 31 Dec 30 Jun
11 10 11 11 10 11
Audited Reviewed Reviewed Reviewed Reviewed Audited
106 860 48 005 63 057 South African 13 469 7 447 19 947
energy
cluster
9 146 4 263 5 107 Mining 1 002 140 1 063
5 445 2 697 3 292 Gas 1 461 1 282 2 578
37 485 15 664 22 337 Synfuels 9 909 5 389 15 188
54 784 25 381 32 321 Oil 1 099 665 1 180
- - - Other (2) (29) (62)
5 872 2 824 4 416 International 1 154 872 1 587
energy
cluster
3 715 1 846 2 910 Synfuels 1 033 539 1 205
International
2 157 978 1 506 Petroleum 121 333 382
International
82 854 39 637 47 162 Chemical 4 339 3 453 8 712
cluster
17 082 8 234 9 398 Polymers 546 574 1 579
17 280 8 120 9 082 Solvents 1 115 440 1 655
31 715 14 636 19 493 Olefins & 1 660 1 600 4 161
Surfactants
16 777 8 647 9 189 Other 1 018 839 1 317
chemical
businesses
6 043 3 801 4 205 Other 1 514 246 (296)
businesses*
201 629 94 267 118 840 20 476 12 018 29 950
(59 193) (27 035) (35 537) Intercompany
turnover
142 436 67 232 83 303
* Includes share-based payment expenses related to the Sasol Inzalo
share transaction and exchange gains on forward exchange contracts.
Overview
Chief Executive Officer, David E. Constable says:
"We are pleased to announce record interim earnings, which continues our strong
track record of delivering superior shareholder returns. We have maintained a
resilient production performance despite challenges. The macro-economic trends,
the global need for energy diversification and energy security are all
supportive of our gas-to-liquids value proposition. Our growth strategy
continues to serve us well and we are positive about the earnings outlook for
the remainder of 2012. Our focus on cost containment and capital project
execution continues as part of our strategy of sustainable value creation across
our businesses in South Africa and abroad."
Earnings attributable to shareholders for the six months ended 31 December 2011
increased by 83% to R13,9 billion from R7,6 billion in the prior year*, while
headline earnings per share and earnings per share increased by 81% to R23,50
and by 82% to R23,05, respectively, over the same period.
Operating profit of R20,5 billion increased by 70% compared with the prior year.
This increase was mainly due to solid operational performance in our businesses,
coupled with a strong improvement in the average crude oil (average dated Brent
was US$111,41/barrel at 31 December 2011 compared with US$81,68/barrel at 31
December 2010) and product prices as well as a 7% weaker rand/US dollar exchange
rate (R7,63/US$ at 31 December 2011 compared with R7,11/US$ at 31 December
2010). In addition, the results have been positively impacted by exchange gains
on forward exchange contracts. Overall, group production volumes were down
compared to the prior comparable period. In South Africa, industrial strike
action and plant incidents negatively impacted volumes. Production utilisation
in other global operations was purposely reduced to match lower demand and
optimise margins.
Chief Financial Officer, Christine Ramon says:
"A solid group operational performance as well as an overall favourable
macroeconomic environment contributed to an excellent set of financial results
and strong cash flow generation. In addition, proactive management actions
resulted in significant margin improvement. We continue to focus on containing
normalised cash fixed costs within inflation, despite a challenging South
African inflationary environment and the negative impact of a weaker rand on
costs for the half year. Our balance sheet remains strong and continues to
provide a buffer against a volatile global economic environment. We remain well-
positioned to fund our carefully selected, exciting growth opportunities, whilst
remaining committed to consistently delivering attractive returns to our
shareholders."
Cash fixed costs increased in real terms by 3% on a normalised basis, excluding
once-off and growth costs, mainly as a result of increased energy imports and
higher plant maintenance at our Secunda operations. Growth costs relate
primarily to our Canadian operations.
The operating profit in the current period was positively impacted by non-
recurring items totalling R74 million (31 December 2010:R800 million negative
impact). These items relate primarily to the profit of R120 million on the sale
of our Sasol Nitro Phalaborwa operations and certain of the upstream fertiliser
businesses. Our overall share-based payment expense of R721 million decreased
from R1 196 million in the prior year, as a result of a decrease of R201 million
Sasol Inzalo BEE share-based payment expense and the once-off Ixia Coal BEE
transaction expense of R565 million, partially offset by an increase in the
Sasol share incentive schemes expense related to the increase in the Sasol share
price.
The decrease in the effective tax rate from 33,7% to 29,3% resulted primarily
from the reduction in non-deductible share-based payment expenses and
competition administrative penalties, compared with the prior year.
Cash flow generated by operating activities was R22,7 billion compared with
R15,1 billion in the prior year. This was mainly due to increased operating
profits, partly offset by increased working capital, both as a result of price
and volume effects. Capital investments for the period was R14,5 billion.
* All comparisons refer to the prior year comparable period unless otherwise
stated.
Pursuing sustainable value creation
To ensure that we continue to build on our successes into the future, we are
focusing on optimising our current businesses and on maximising our growth
opportunities. To achieve these objectives, we will focus on further
globalisation through geographic and people diversification, as well as
expanding our chemicals and energy footprint.
Opportunities abound in the upstream, downstream chemical and new energy arenas.
All our businesses and functions will continue to operate sustainably,
underpinned by sound governance. Continuing to deliver sustainable value through
our operational excellence and functional excellence initiatives in our existing
asset base, underpins the achievement of our objectives. Our growth will further
be supported by our capital excellence programme, allowing us to achieve world-
class capital project execution. These initiatives will also continue to support
our commitment to energy efficiency and our environmental projects. In addition,
we will seek to become more globally-orientated and customer-focused, through
our sales and marketing excellence initiative across the group. Safety remains
an imperative and we will continue striving for zero harm production.
During the period, we have paid R13,5 billion direct and indirect taxes to the
South African government. Sasol remains one of the largest corporate tax payers
in South Africa, contributing significantly to the South African economy.
During the period, we continued to make progress in pursuing sustainable
initiatives to help reduce our carbon footprint:
* Sasol New Energy continued to progress various alternative energy studies
and projects to various stages of completion. These studies included the
generation of electricity from natural gas in both South Africa and
Mozambique, solar based renewable energy projects and hydro electricity
generation. Our in-house knowledge in respect of carbon capture and storage
as well as underground coal gasification was further advanced during the
period.
* We continued to invest in the European CO2 Technology Centre Mongstad, in
Norway. The construction of a carbon capture facility is on track, with the
start up of various components of the plant in progress.
* Sasol New Energy has engaged with BrightSource Energy Inc., to advance
concentrated solar power technology in South Africa. This project has the
potential to expand our new energy portfolio and contribute to the
country`s transition to a lower-carbon economy.
* The recordable case rate (RCR) for employees and service providers,
including injuries and illnesses, of 0,43 at 31 December 2011 is comparable
to the RCR rate of 0,42 at 30 June 2011. Safety improvement remains a
strategic imperative for sustainable operations.
Steady progress on projects
We are steadily advancing our growth ambitions, supported by our strong balance
sheet:
* The advancement and acquisition of natural gas assets in support of
leveraging our gas-to-liquids (GTL) technology continued to progress over
the period:
* In respect of our Canadian shale gas assets, activities on the Farrell
Creek asset continue with a multi-rig drilling programme designed to
add production in the core areas and appraising the less calibrated
areas. Continued and significant efforts are focused on driving down
drilling and completion costs and optimising the fracking techniques
to maximise productivity and increase the overall economic robustness
of the project, notably in a low gas price environment. Production
from the Cypress A area continues from the existing six wells with a
single additional well planned for the 2012 calendar year for
retention of acreage.
* During the period, Sasol Petroleum International`s (SPI) onshore
appraisal campaign of the Inhassoro oil discovery in Mozambique
focused on the production test of the I-9Z horizontal well, which is
expected to commence during the first half of the 2012 calendar year.
* In October 2011, 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, achieved beneficial operation.
* We have completed the technical study for shale gas in the Karoo Basin
and based on our technical assessment, we concluded that the
subsurface risk in this part of the basin is too high for the
partnership. Following the expiry of our technical co-operation permit
in November 2011, we decided to relinquish the area.
* Together with our partner Origin, we made entry into a coal bed
methane venture in Botswana and at present are planning for field
studies and activities in the latter part of the 2012 calendar year.
* We have also been successful in securing a technical co-operation
permit offshore Durban, South Africa, and have started our evaluation
of the area.
* The feasibility study to determine the technical and commercial viability
of an integrated GTL and chemicals facility in Louisiana in the United
States has commenced and is expected to be concluded in the 2013 calendar
year.
* During the period, we also commenced with a feasibility study to assess the
technical and commercial viability of a world-scale ethane cracker and
associated ethylene derivatives in Louisiana. The feasibility study is also
expected to be concluded in the 2013 calendar year.
* The feasibility study to determine the technical and commercial viability
of a GTL plant in western Canada is progressing and is expected to be
completed towards the second half of the 2012 calendar year.
* The front end engineering and design (FEED) for the Uzbekistan GTL plant
commenced in October 2011, following the signing of the investment
agreement with our partners, Uzbekneftegaz and Petronas. FEED is expected
to be completed in the 2013 calendar year.
* The Synfuels growth programme is progressing well with the gas turbines,
10th Sasol advanced synthol reactor and 16th oxygen train delivering to
expectations, and construction on the gas heated heat exchange reformers
project continues. In related projects, the first of four new gasifiers was
commissioned successfully, with commissioning of the 17th reformer expected
in the second quarter of the 2012 calendar year.
* During the period, Sasol New Energy began construction of a 140 megawatt
electricity generation plant in Sasolburg, South Africa. The plant will
utilise natural gas as its feedstock. It is anticipated that the facility
will be on line and reach full capacity during the first half of the 2013
calendar year.
* Progress has been made during the period on extending our reserves at Sasol
Mining. The construction of a mine which will support the long-term coal
export market continues to progress, with an anticipated completion date
towards the first half of the 2013 calendar year. The construction of a
further two collieries, at a total estimated cost of R9,8 billion, is
expected to be completed in 2015 and 2016, respectively.
* The Gauteng Network Gas Pipeline expansion project, at an estimated cost of
R1,6 billion, advanced during the period and is expected to be completed
during the second half of the 2012 calendar year.
* The Alrode Depot expansion project is nearing completion and is expected to
be fully operational by the end of the third quarter of the 2012 calendar
year.
* Work on the Clean Fuels 2 project for Sasol Synfuels and Natref is
progressing well and it is expected that the feasibility studies will be
completed by the end of the 2012 calendar year.
* Construction on the wax production facility in Sasolburg, South Africa,
continues to progress according to plan.
* Our ethylene purification unit project in Sasolburg, which will yield
additional ethylene to support our polymer plants to run continuously is
expected to be in operation during the second half of the 2012 calendar
year, at an estimated cost of R1,8 billion.
Climate change initiatives and policies
Towards the end of 2011, Sasol worked with the South African government and
other stakeholders as part of "Team South Africa" to ensure that the 17th
meeting of the Conference of the Parties (COP 17) in Durban was
successfully hosted. Sasol was well-represented at COP 17 and we were able
to build both awareness of the issues that we face in responding to climate
change challenges and to showcase the progress that South Africa has made
in moving towards a lower carbon and climate resilient economy. In
particular, we were able to highlight:
* the role of gas as a bridge to a lower carbon economy,
* our progress with respect to improved energy efficiency, and
* our work in the area of carbon capture and storage both in South
Africa and through our share in the Technology Centre Mongstad, in
Norway.
On 22 February 2012, the South African Finance Minister, Minister Gordhan,
announced that a revised policy paper on a carbon tax will be published
this year for a second round of public comment and consultation. Sasol is
studying the proposed tax, as detailed in the full budget review document,
and will actively consult with government once the revised policy paper has
been published.
Sasol will continue to engage the South African government and other
stakeholders on climate change-related policies and initiatives, to find
workable and sustainable solutions to the climate change challenge, while
remaining mindful of energy security requirements, growth imperatives, and
socio-economic impacts associated with a transition to a lower-carbon
economy.
Solid performance from our operations
South African energy cluster
Sasol Mining - higher US dollar coal prices continue
Operating profit of R1 002 million was 42% higher than the prior year after
taking into account the once-off Ixia Coal transaction share-based payment
expense of R565 million recognised in the prior year. Production volumes
increased by approximately 2%, despite industrial action and adverse geological
conditions. The improved operating profit was supported by higher US dollar
export coal prices and sales prices to Sasol Synfuels, together with the weaker
rand/US dollar exchange rate.
Sasol Gas - improved sales prices
Operating profit increased by 14% to R1 461 million compared with the prior year
mainly as a result of higher gas prices and marginally higher sales volumes,
despite the negative impact of exchange rates on gas purchases and the costs
associated with the start-up in October 2010 of a new compressor station in
Komatipoort, South Africa.
Sasol Synfuels - higher prices, lower production volumes
Sasol Synfuels` operating profit increased by 84% to R9 909 million compared
with the prior year primarily due to higher average rand oil prices resulting in
favourable product prices. Production volumes were 1,3% lower than the prior
year due to the industrial action during the period as well as plant
instabilities. Operating profits were also negatively impacted by higher
feedstock and energy costs as well as increased maintenance costs.
Sasol Oil - higher wholesale margins
Operating profit increased by 65% to R1 099 million compared with the prior
year, despite lower production and sales volumes resulting from an extended
planned shutdown at the Natref refinery and industrial action during the period.
Higher wholesale margins and the impact of the weaker rand/US dollar exchange
rate underpinned the improved operating profit.
International energy cluster
Sasol Synfuels International (SSI) - strong performance from ORYX
SSI`s operating profit increased by 92% to R1 033 million compared with the
prior year. This was mainly due to higher crude oil and product prices coupled
with increased sales volumes, which were partly negated by exchange rate
variances. The ORYX GTL plant in Qatar delivered a strong performance, achieving
an average daily production of 28 700 barrels per day, at an average utilisation
rate of 89%.
Sasol Petroleum International (SPI) - improved volumes from Gabon and Canada
Operating profit decreased by 64% to R121 million compared with the prior year.
Higher oil prices and increased sales volumes from our Gabon and Canada
operations contributed positively to the operating profit; however, the
favourable impact was offset by negative foreign exchange translation effects
from foreign operations as well as depreciation of our recently acquired
Canadian assets. While, exploration expenditure in Mozambique and Gabon was
lower during the period, expenditure on growth initiatives increased.
Chemical cluster
Sasol Polymers - Arya Sasol Polymer Company (ASPC) ramps up to design capacity
Sasol Polymers` operating profit decreased by 5% to R546 million compared with
the prior year. Operating profit was negatively impacted by a 6% decrease in
production volumes from our local operations, which was partially compensated by
an increase from our international operations. Our international operations
contributed R937 million to operating profit. ASPC ramped up to design capacity
during the period, with an average year to date capacity utilisation rate of
81%. International polymer prices contributed to the decrease in operating
profit, but their effect was partially offset by the weaker rand/US dollar
exchange rate. Our local operations experienced a significant margin squeeze due
to increased feedstock costs as a result of the increase in average crude oil
prices.
Sasol Solvents - higher product prices
Operating profit increased by 153% to R1 115 million compared with the prior
year. This is mainly due to higher prevailing product prices, despite lower
sales volumes. The increased operating profit was assisted by a weaker rand/US
dollar exchange rate, which negated deteriorating market conditions over the
period. Production volumes reflected a decline compared with the prior year as a
result of planned and unplanned outages at production facilities, as well as
production cut-backs due to market constraints.
Sasol Olefins & Surfactants (Sasol O&S) - improved margins
Operating profit increased by 4% to R1 660 million compared with the prior year,
mainly as a result of strong gross margins, in particular during the first half
of the period. There were some reductions in volumes during the latter part of
the period as a result of seasonal fluctuations. The increase in operating
profit was positively impacted by foreign currency translation effects.
Other chemical businesses - strong prices in Sasol Nitro offsets lower volumes
Operating profit in our other chemical businesses increased by 21% to R1 018
million compared with the prior year. Sales and production volumes in the wax
markets declined on the back of lower demand in the United States and European
markets and production difficulties in South Africa.
Despite lower fertiliser sales volumes, due to exiting the retail fertiliser
business, higher margins were achieved in the Sasol Nitro business. The
improvement in operating profits was supported by the weaker rand/US dollar
exchange rate. Operating profit includes a once-off profit of R120 million
resulting from the sale of Sasol Nitro`s Phalaborwa operations and certain of
its upstream fertiliser 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
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 South African Competition Commission (the Commission) is conducting
investigations into the South African piped gas, petroleum, coal mining,
fertilisers and polymer industries. As part of its investigation into the
polymer industry, the Commission has contended that the prices at which Sasol
Polymers supplies propylene and polypropylene are excessive. Sasol Polymers does
not agree with the Commission`s position in this regard and is contesting the
Commission`s allegations. The Competition Tribunal hearing is scheduled for July
2012. 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 31 December 2011.
Balance sheet remains strong
Gearing at 31 December 2011 of 7,2% (30 June 2011: 1,3%) 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 25 November 2011, shareholders renewed the authority to the
Sasol directors 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 period.
Profit outlook* - well positioned to deliver increased earnings for the 2012
financial year
Crude oil prices have been increasing steadily supported by recent developments
in supply and geopolitics in the Middle East/North Africa. The rand/US dollar
exchange rate remains the single biggest external factor impacting our
profitability.
At Synfuels we are on track to produce between 7,0 to 7,2 million tons of
product for the financial year 2012. In our international operations we expect
ORYX GTL to achieve a full-year utilisation rate of between 80% and 90% of
nameplate capacity and we remain confident that full-year production at ASPC
will be above 80% of nameplate capacity. Despite the production delays
experienced at Farrell Creek, we expect volume growth from this shale gas
venture. Although demand and prices for chemicals have softened recently, we
still maintain solid operating margins. Our South African Polymers operations
are experiencing margin pressure, which is expected to continue.
In view of recent developments regarding trade restrictions and possible oil
sanctions against Iran, Sasol Oil is diversifying its crude oil sourcing, to
mitigate risks associated with oil supply disruptions from the Middle East.
In addition, we remain committed to containing normalised cash fixed costs
within inflation.
Our resilient operations will enable us to benefit from the favourable rand
commodity prices and therefore we are well-positioned to deliver increased
earnings for the 2012 financial year.
The macro economic conditions continue to be volatile, impacting our assumptions
in respect of improved crude oil and product prices, weaker refining margins as
well as the weaker rand/US dollar exchange rate. Our focus remains on factors
within our control: volume growth, margin improvement and cost containment
within inflation. The current volatility and uncertainty of global markets and
geopolitical activities makes it difficult to be more precise in this outlook
statement.
Taking into account the ongoing strength of our financial position and current
capital investment plans, as well as the increased earnings, management has
recommended and the board has approved the interim dividend. This approach
remains in line with our progressive dividend policy and our commitment to
consistently return value to shareholders.
The proposed amendments to the tax treatment of dividends in South Africa will
become effective on 1 April 2012. The group`s final dividend for year ended 30
June 2012 and dividends declared thereafter will be affected by a dividend
withholding tax. As a result of the withdrawal of secondary tax on companies
(STC) and the introduction of a dividend withholding tax, the board intends to
pass on the savings in STC to shareholders by increasing the dividend payment
for the current financial year. We will continue to assess future dividends
taking into account our progressive dividend policy.
* In accordance with standard practice, it is noted that this information has
not been reviewed nor reported on by the company`s auditors.
Subsequent events
On 10 January 2012, Sasol Germany GmbH announced that it had reached agreement
to sell its production site in Witten, Germany. All conditions precedent were
met on 29 February 2012.
Activities to further the potential disposal of our investment in ASPC are
progressing. Further announcements will be made once sufficient certainty is
achieved.
Appointment of director
On 29 November 2011, Mr MZ Mkhize was appointed as an independent non-executive
director of Sasol Limited.
Declaration of cash dividend number 65
An interim cash dividend of South African R5,70 per ordinary share (2010: R3,10
per share) has been declared for the six months ended 31 December 2011. The
interim 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:
Declaration date Monday, 12 March 2012
Last day for trading to qualify for and Wednesday, 4 April 2012
participate in the interim dividend (cum
dividend)
Trading ex dividend commences Thursday, 5 April 2012
Record date Friday, 13 April 2012
Dividend payment date Monday, 16 April 2012
Holders of American Depositary Receipts1
Ex dividend on New York Stock Exchange (NYSE) Wednesday, 11 April 2012
Record date Friday, 13 April 2012
Approximate date for currency conversion Tuesday, 17 April 2012
Approximate dividend payment date Thursday, 24 April 2012
(1) All dates are approximate as the NYSE sets the record date after receipt of
the dividend declaration.
On Monday, 16 April 2012, 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, 16 April 2012.
Share certificates may not be dematerialised or re-materialised between
Wednesday, 4 April 2012 and Friday, 13 April 2012, both days inclusive.
On behalf of the board
Hixonia Nyasulu
Chairman
David E. Constable
Chief Executive Officer
Christine Ramon
Chief Financial Officer
Sasol Limited
9 March 2012
The interim financial statements are presented on a condensed consolidated
basis.
Statement of financial position
at
31 Dec 11 31 Dec 10 30 Jun 11
Reviewed Reviewed Audited
Rm Rm Rm
Assets
Property, plant and equipment 86 566 74 173 79 245
Assets under construction 35 437 23 038 29 752
Goodwill 792 701 747
Other intangible assets 1 104 1 101 1 265
Investments in associates 3 718 2 978 3 071
Post-retirement benefit assets 902 768 792
Deferred tax assets 1 241 1 003 1 101
Other long-term assets 2 997 2 042 2 218
Non-current assets 132 757 105 804 118 191
Assets held for sale 343 121 54
Inventories 21 712 16 337 18 512
Trade and other receivables 23 975 20 487 23 174
Short-term financial assets 408 40 22
Cash restricted for use 7 817 2 489 3 303
Cash 8 857 13 330 14 716
Current assets 63 112 52 804 59 781
Total assets 195 869 158 608 177 972
Equity and liabilities
Shareholders` equity 120 503 95 876 107 649
Non-controlling interest 2 790 2 550 2 691
Total equity 123 293 98 426 110 340
Long-term debt 14 162 14 319 14 356
Long-term financial liabilities 39 59 103
Long-term provisions 9 405 7 588 8 233
Post-retirement benefit 5 144 4 529 4 896
obligations
Long-term deferred income 404 360 498
Deferred tax liabilities 13 834 11 189 12 272
Non-current liabilities 42 988 38 044 40 358
Liabilities in disposal groups
held for sale
36 4 -
Short-term debt 3 097 1 239 1 602
Short-term financial liabilities 127 289 136
Other current liabilities 26 044 20 393 25 327
Bank overdraft 284 213 209
Current liabilities 29 588 22 138 27 274
Total equity and liabilities 195 869 158 608 177 972
Income statement
for the period ended
half year half year full year
31 Dec 11 31 Dec 10 30 Jun 11
Reviewed Reviewed Audited
Rm Rm Rm
Turnover 83 303 67 232 142 436
Cost of sales and services (53 936) (42 901) (90 467)
rendered
Gross profit 29 367 24 331 51 969
Other operating income 613 292 1 088
Marketing and distribution (3 589) (3 350) (6 796)
expenditure
Administrative expenditure (5 331) (5 612) (9 887)
Other operating expenditure (584) (3 643) (6 424)
Competition related fines - (112) (112)
Effect of crude oil hedges 50 (25) (118)
Share-based payment expenses (721) (1 196) (2 071)
Effect of remeasurement items (303) (177) (426)
Translation gains/(losses) 1 642 (919) (1 016)
Other expenditure (1 252) (1 214) (2 681)
Operating profit 20 476 12 018 29 950
Finance income 428 565 991
Share of profits of 269 137 292
associates (net of tax)
Finance expenses (972) (983) (1 817)
Profit before tax 20 201 11 737 29 416
Taxation (5 927) (3 953) (9 196)
Profit for the period 14 274 7 784 20 220
Attributable to
Owners of Sasol Limited 13 894 7 601 19 794
Non-controlling interest in 380 183 426
subsidiaries
14 274 7 784 20 220
Rand Rand Rand
Earnings per share
Basic earnings per share 23,05 12,68 32,97
Diluted earnings per share1 22,91 12,69 32,85
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 period ended
half year half year full year
31 Dec 11 31 Dec 10 30 Jun 11
Reviewed Reviewed Audited
Rm Rm Rm
Cash receipts from customers 83 633 66 651 138 955
Cash paid to suppliers and (60 975) (51 558) (100 316)
employees
Cash generated by operating 22 658 15 093 38 639
activities
Finance income received 639 719 1 380
Finance expenses paid (343) (778) (898)
Tax paid (5 163) (2 238) (6 691)
Dividends paid (6 090) (4 713) (6 614)
Cash retained from operating 11 701 8 083 25 816
activities
Additions to non-current assets (14 540) (9 217) (20 665)
Acquisition of interest in (28) - (3 823)
joint ventures
Disposal of businesses 33 - 22
Additional investments in (80) - (91)
associate
Other net cash flows from (36) 76 92
investing activities
Cash utilised in investing (14 651) (9 141) (24 465)
activities
Share capital issued 217 248 430
Contributions from non- - 27 27
controlling shareholders in
subsidiaries
Dividends paid to non- (288) (313) (419)
controlling shareholders in
subsidiaries
(Decrease)/increase in long- (913) 672 545
term debt
Increase/(decrease) in short- 1 503 (215) (295)
term debt
Cash effect of financing 519 419 288
activities
Translation effects on cash and 1 011 (347) (421)
cash equivalents of foreign
operations
(Decrease)/increase in cash and (1 420) (986) 1 218
cash equivalents
Cash and cash equivalents at 17 810 16 592 16 592
beginning of period
Cash and cash equivalents at 16 390 15 606 17 810
end of period
Statement of comprehensive income
for the period ended
half year half year full year
31 Dec 11 31 Dec 10 30 Jun 11
Reviewed Reviewed Audited
Rm Rm Rm
Profit for the period 14 274 7 784 20 220
Other comprehensive income
Effect of translation of 4 575 (2 813) (2 031)
foreign operations
Effect of cash flow hedges 38 (41) 111
Investments available-for-sale (4) - -
Tax on other comprehensive (9) 19 (23)
income
Other comprehensive income for 4 600 (2 835) (1 943)
the period, net of tax
Total comprehensive income for 18 874 4 949 18 277
the period
Attributable to
Owners of Sasol Limited 18 487 4 768 17 849
Non-controlling interests in 387 181 428
subsidiaries
18 874 4 949 18 277
Statement of changes in equity
for the period ended
half year half year full year
31 Dec 11 31 Dec 10 30 Jun 11
Reviewed Reviewed Audited
Rm Rm Rm
Opening balance 110 340 97 242 97 242
Shares issued during period 217 248 430
Share-based payment expenses 240 1 017 1 428
Disposal of businesses - (4) (4)
Total comprehensive income for 18 874 4 949 18 277
the period
Dividends paid (6 090) (4 713) (6 614)
Dividends paid to non- (288) (313) (419)
controlling shareholders in
subsidiaries
Closing balance 123 293 98 426 110 340
Comprising
Share capital 27 876 27 477 27 659
Share repurchase programme (2 641) (2 641) (2 641)
Sasol Inzalo share transaction (22 054) (22 054) (22 054)
Retained earnings 106 394 88 298 98 590
Share-based payment reserve 8 264 7 613 8 024
Foreign currency translation 2 674 (2 676) (1 895)
reserve
Investment fair value reserve 2 5 5
Cash flow hedge accounting (12) (146) (39)
reserve
Shareholders` equity 120 503 95 876 107 649
Non-controlling interest in 2 790 2 550 2 691
subsidiaries
Total equity 123 293 98 426 110 340
Salient features
for the period ended
half half year full year
year 31 Dec 10 30 Jun 11
31 Dec
11
Selected ratios
Return on equity % 25,7* 16,7* 19,6
Return on total % 23,9* 16,6* 18,7
assets
Operating margin % 24,6 17,9 21,0
Finance expense times 61,7 16,3 34,8
cover
Dividend cover times 4,1 4,2 2,5
* Annualised
Share statistics
Total shares in million 672,5 669,7 671,0
issue
Treasury million 8,8 8,8 8,8
shares(share
repurchase
programme)
Weighted average million 602,7 599,6 600,4
number of shares
Diluted weighted million 615,0 614,4 614,5
average number of
shares
Share price Rand 385,50 346,28 355,98
(closing)
Market 259 231 238
capitalization Rm 247 904 863
- Total Sasol shares
- Sasol BEE ordinary Rm 710 - 742
shares
Net asset value per Rand 200,64 160,38 179,68
share
Dividend per share Rand 5,70 3,10 13,00
- interim Rand 5,70 3,10 3,10
- final Rand - - 9,90
Other financial
information
Total debt
(including bank
overdraft)
- interest bearing Rm 16 895 15 142 15 522
- non-interest Rm 648 629 645
bearing
Capital commitments Rm 49 692 43 662 48 321
- authorised and Rm 46 973 31 840 41 367
contracted
- authorised, not Rm 33 892 34 440 33 458
yet contracted
- less expenditure Rm (31 (22 618) (26 504)
to date 173)
Guarantees and
contingent
liabilities
- total amount Rm 39 073 17 371 30 991
- liability included Rm 11 401 10 286 10 734
in the statement of
financial position
Significant items in
operating profit
- employee costs Rm 9 182 8 676 18 756
- depreciation and Rm 4 393 3 537 7 400
amortisation of non-
current assets
- share-based Rm 721 1 196 2 071
payment expenses
Sasol share Rm 490 199 676
incentive schemes
Sasol Inzalo share Rm 231 432 830
transaction
Ixia Coal Rm - 565 565
transaction
Effective tax rate1 % 29,3 33,7 31,3
Number of employees number 34 626 33 550 33 708
Average crude oil US$/barrel 111,41 81,68 96,48
price - dated Brent
Average rand/US$ 1US$ = 7,63 7,11 7,01
exchange rate Rand
Closing rand/US$ 1US$ = 8,09 6,62 6,77
exchange rate Rand
1 Decrease in effective tax rate as a result of the absence of
competition related administrative penalties and lower share-based
payment expenses which are not deductible for tax.
Reconciliation of headline Rm Rm Rm
earnings
Profit for the period 13 894 7 601 19 794
attributable to owners of Sasol
Limited
Effect of remeasurement items 303 177 426
Impairment of assets 208 161 171
Reversal of impairment (23) (31) (516)
Profit on disposal of business (120) (3) (9)
Profit on disposal of associate (6) (6) (6)
Profit on disposal of assets (4) (10) (14)
Scrapping of non-current assets 240 66 359
Write off of unsuccessful 8 - 441
exploration wells
Tax effects and non-controlling (36) (3) 106
interests
Headline earnings 14 161 7 775 20 326
Remeasurement items per
above
Mining 54 (1) 3
Gas - 7 6
Synfuels 108 34 197
Oil 4 (7) 17
Synfuels International 33 133 126
Petroleum International 9 1 442
Polymers 45 10 46
Solvents 61 32 63
Olefins & Surfactants 102 (23) (500)
Other chemical businesses (119) (14) (11)
Nitro (113) (8) (1)
Wax (1) (6) (3)
Infrachem 5 - (8)
Merisol (10) - 1
Other businesses 6 5 37
Remeasurement items 303 177 426
Rand 23,50 12,97 33,85
Headline earnings per
share
Diluted headline earnings Rand 23,34 12,98 33,72
per share
The reader is referred to the definitions contained in the 2011
Sasol Limited annual financial statements.
Basis of preparation and accounting policies
The condensed consolidated interim financial results for the six months ended 31
December 2011 have been prepared in accordance with International Accounting
Standard 34 Interim Financial Reporting, the AC500 Standards as issued by the
Accounting Practices Board or its successor and the South African Companies Act,
2008, as amended.
The accounting policies applied in the presentation of the interim financial
results are consistent with those applied for the year ended 30 June 2011 and
are in terms of International Financial Reporting Standards (IFRS) as issued by
the International Accounting Standards Board, except as follows:
Sasol Limited has early adopted the following standards, which did not have a
significant impact on the financial results:
* IFRS 7 (Amendments), Financial Instruments: Disclosures - Offsetting
Financial Assets and Financial Liabilities.
* IAS 32 (Amendments), Financial Instruments: Presentation - Offsetting
Financial Assets and Financial Liabilities.
* IFRIC 20, Stripping Costs in the Production Phase of a Surface Mine.
These condensed consolidated interim 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 condensed consolidated interim financial results are presented in South
African rand, which is Sasol Limited`s functional and presentation currency.
Christine Ramon CA(SA), Chief Financial Officer, is responsible for this set of
financial results and has supervised the preparation thereof in conjunction with
the Executive: Group Finance, Paul Victor CA(SA) and the General Manager: Group
Statutory Reporting, Samantha Barnfather CA(SA).
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 2011
Sasol Synfuels was in legal proceedings with regard to the operation of a plant
in Secunda. Ashcor claimed damages of R313 million relating to their inability
to develop their business and a projected loss of future cash flows. On 28
September 2011, the Supreme Court of Appeal of South Africa dismissed the appeal
by Ashcor. These proceedings have been decided in favour of Sasol.
As a result of the fine imposed on Sasol Wax GmbH in October 2008 by the
European Commission, on 23 September 2011, Sasol Wax GmbH was served with a law
suit in The Netherlands by a company to which potential claims for compensation
of damages have been assigned to by eight customers. On 30 September 2011,
another law suit has been lodged with the London High Court by 30 plaintiffs
against Sasol Wax GmbH, Sasol Wax International AG and Sasol Holding in Germany
GmbH. The law suits do not demand a specific amount for payment. The plaintiffs
are trying to specify the amount of alleged damages. The result of these
proceedings cannot be determined at present.
Independent review by the auditors
The condensed consolidated interim financial results for the six months ended 31
December 2011 were reviewed by KPMG Inc. The individual auditor assigned to
perform the review is Mr CH Basson. Their unmodified review report is available
for inspection at the registered office of the company.
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): Mrs TH Nyasulu (Chairman), Mr C Beggs*, Mr HG
Dijkgraaf (Dutch)*, Dr MSV Gantsho*, Ms IN Mkhize*, Mr MZ Mkhize*, Mr MJN
Njeke*, Prof JE Schrempp (German)
(executive): Mr DE Constable (Chief Executive Officer) (Canadian),
Mrs 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: ZAE000006896 US8038663006
Sasol BEE Ordinary shares:
Share code: SOLBE1
ISIN: 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
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 7 October 2011 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
Date: 12/03/2012 07:05:04 Supplied by www.sharenet.co.za
Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
