Wrap Text
Sasol Chief Financial Officer Update
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 CHIEF FINANCIAL OFFICER UPDATE
3 December 2012
Highlights for the period
- Sasol Synfuels delivers a strong operational performance.
- ORYX GTL continues to achieve new production records.
- US$1 billion bond successfully issued.
- US ethane cracker and GTL projects advanced to FEED
phase.
Dear stakeholder
In the first three months of the 2013 financial year*, we have
delivered strong financial results, despite the ongoing global
economic uncertainty and labour turmoil in South Africa. The
group benefited from improvements in the operational
performance of its foundation businesses, as well as a weaker
rand/dollar exchange rate. Sasol Synfuels delivered an
exceptional operational performance, despite a planned phased
maintenance outage in September 2012. The average Brent crude
oil price for the three months softened and chemical prices
remained depressed, negatively impacting our chemicals
businesses, where demand continues to remain soft. Our
Canadian shale gas assets have continued to ramp up
production, and our ORYX GTL and Arya Sasol Polymer Company
ventures continue to exceed performance expectations.
Delivering sustainable value for our shareholders underpins
all our actions. Accordingly, taking into account the
financial and human resource requirements as well as the
strategic implications, we have reviewed and prioritised the
projects in our project pipeline. Based on our review, we have
staggered our growth opportunities to sharpen our focus on
successful project execution and delivery. Furthermore, we
continue to focus on those factors within our control
including cost containment, operational efficiencies and
margin improvement.
We were very pleased to announce our successful US$1 billion
bond issuance. The bond, with a tenure of 10 years and a fixed
coupon rate of 4,5%, was oversubscribed by 3,47 times. The
coupon is the lowest ever achieved by a South African non-
state owned enterprise. This reflects the confidence that
investors have in our company and in our ability to deliver
value. The proceeds from this offering will be used for
general corporate purposes, including the funding of our
capital investments.
We remain confident that, based on the production guidance and
our macroeconomic assumptions, we will deliver solid
operational performance and earnings for the 2013 financial
year compared to the reported attributable earnings of R23,6
billion in the 2012 financial year, excluding the impact
resulting from the Arya Sasol Polymer Company potential
impairment. This impairment will not have an impact on
headline earnings per share. The increased uncertainty within
the Iranian environment coupled with the devaluation of the
Iranian currency, may further negatively impact our earnings.
Best regards
Christine Ramon
3 December 2012
Johannesburg
*This update is based on information for the three months
ended 30 September 2012, however, where practical, information
to 31 October 2012 has been included to indicate business
performance.
1. Weakening macroeconomics
Oct Sept Sept Change %
2012 2012 2011 Sept
YTD YTD YTD YTD
Macroeconomic indicators
Average rand/US$ 8,36 8,26 7,15 16%
Brent crude oil (US$/b) 110 110 113 (3%)
Henry Hub gas price
(US$/MMBTU) 2,99 2,88 4,13 (30%)
Product prices
SA fuel price (US$/b) 132 129 135 (4%)
Ethylene (US$/ton) 1 519 1 468 1 571 (7%)
Propylene (US$/ton) 1 358 1 317 1 571 (16%)
Polymers basket (US$/ton) 1 205 1 195 1 349 (11%)
Solvents basket (US$/ton) 1 168 1 144 1 467 (22%)
Prices reflect international commodities or baskets of
commodities and are not necessarily Sasol specific.
Sources: RSA Department of Energy, ICIS-LOR, Reuters,
Platts, International Energy Agency
Global economic conditions remained challenging in the first
quarter of our 2013 financial year, with the Euro-zone
remaining in the grip of recession and the growth in China’s
gross domestic product easing further. On a more positive
note, economic activity in the United States (US) improved
and early second quarter economic indicators suggest a
stabilisation in the housing market and improved consumer
confidence. In South Africa, economic growth remained
subdued and below potential. Of particular concern is the
labour unrest in the country, particularly in the mining
sector, which was significantly impacted. Our own mining
operations were not affected by any strike action during the
period, owing to healthy labour relations and our ongoing
corporate social investment in our surrounding communities.
As a result of these challenges, South Africa recently
received a downgrade in its credit rating from Standard &
Poor’s as well as Moody’s Investor services.
Overall, the global economy continues to weather the
economic crisis. However, the outlook remains subject to a
number of downside risks, which include the ongoing European
debt crisis, the potential US “fiscal cliff”, as well as the
possibility of a faster-than-expected slowdown in China’s
economic growth. Given these uncertainties, it is expected
that currency and oil price volatility will persist for some
time to come.
In the first quarter of the 2013 financial year, the average
rand Brent crude oil price rose by 2,7% on a quarter-by-
quarter basis. International chemical prices were weaker,
due to lower demand in downstream markets because of reduced
consumer confidence in Europe and a slowdown in the Chinese
economy.
Chemical product margins continued to be under pressure as
feedstock price increases, in line with higher oil prices,
outweighed the increases in selling prices. This has been
particularly evident in our Sasol Polymers and Sasol
Solvents businesses, which have experienced lower demand and
softer product prices on the back of weakening European
macroeconomic conditions. Our Sasol Olefins and Surfactants
(O&S) business has been able to reduce volumes, while
maintaining total gross margin.
Across our operations, we remain focused on working capital
management, cost containment, production planning and
optimisation as well as margin improvement activities.
2. Improved operational performance
Oct Sept Sept Change %
2012 2012 2011 Sept
YTD YTD YTD YTD
Total production
Sasol Mining (mt) 13,1 9,6 9,8 (2%)
Sasol Gas (mGJ) 56,8 41,8 37,3 12%
Sasol Synfuels (kt) 2 426 1 785 1 590 12%
ORYX GTL* (mbbl) 1,75 1,50 1,27 18%
Sasol O&S (kt) 632,6 471,9 529,7 (11%)
Arya Sasol Polymer Company*
(kt) 143,8 113,9 80,6 41%
Canada shale gas assets*
(bscf) 8,1 5,9 2,9 100%
* Sasol’s share of production
Sasol Synfuels’ year-to-date production for the three months
to 30 September 2012 was 1,8 million tons. This represents a
12% increase compared to the prior year comparable period,
which was underpinned by stable operations of the running
plant during a planned phased maintenance outage in
September 2012. Although start-up was somewhat later than
anticipated, the maintenance outage was completed by the end
of September 2012. The commissioning of new equipment during
the period, in particular the additional four gasifiers and
the impact of the 17th reformer, contributed to the
performance of the plant. The strong production performance,
as well as favourable prices, supported increased operating
margins for the period. These were, however, partially
offset by increased energy costs as well as increased
maintenance costs related to renewal maintenance. Sasol
Synfuels’ cash unit costs remain under pressure as a result
of higher coal and natural gas feedstock prices (which are
largely internal to the group), as well as increased energy
and maintenance costs.
Due to technical and labour productivity challenges, there
will be a delay in the conversion of the two auto thermal
reformers to gas heated heat exchange reformers (GHHERs).
Accordingly, the GHHERs programme will be extended to run
through to the second half of the 2013 calendar year. As a
consequence, additional capital expenditure of around R850
million will be required. We, however, do not anticipate
this to have an impact on our production volumes guidance of
between 7,2 and 7,4 million tons for the full 2013
financial year.
Our ORYX GTL joint venture, in Qatar, continues to perform
well, achieving 1,5 million barrels (mbbl) (Sasol’s 49%
share) cumulative production over the three month period,
which on average is above design capacity.
The performance of our Sasol Olefins & Surfactants’ business
for the three month period highlights the contrasting supply
and market conditions that prevail between our US and
European operations. The US continues to be supported by
favourable feedstock prices, in particular ethane, while our
European operations, most notably the surfactants and
alkylate value chains, are experiencing pressure on earnings
and margins due to softer demand and difficulties in
securing feedstock at favourable prices. Overall production
and sales volumes, in the three months to 30 September 2012,
decreased by 11% and 6%, respectively, when compared to the
prior year comparable period. Our focus remains on improving
margins through product portfolio optimisation and strict
cost management. The ethylene tetramerisation unit,
currently being constructed for Sasol Solvents at our Lake
Charles, Louisiana site in the US, remains on schedule and
is expected to start-up during the third quarter of the 2013
calendar year.
Arya Sasol Polymer Company (ASPC) continues to perform well.
Production volumes were 41% up compared to the prior year
comparable period. Sasol’s 50% share of the year-to-date
total production output from the plants was 114 kt,
achieving an average utilisation rate for the three month
period of approximately 96,9% of design capacity. However,
due to market challenges, specifically in the Far East,
sales volumes were negatively impacted. Further challenges
emerged during the period as a result of the devaluation of
the average Iranian rial exchange rate against the US dollar
by more than 100% over the last six months of the 2012
calendar year. We previously announced our intention to
divest of our investment in ASPC. The divestiture process is
continuing. The investment in ASPC is being considered for
classification as an asset held-for-sale. However,
significant uncertainty remains regarding the fair value of
the asset. Accordingly, it is possible that the carrying
value of the investment may be impaired at 31 December 2012.
Figure 1: Global chemical prices for 2013 (US$/metric ton)
Please refer to Sasol's website at www.sasol.com for Figure 1.
Our South African-based polymers business continues to
experience margin pressure in line with the global polymers
industry, incurring an operating loss of R682 million for
the three months ended 30 September 2012 (operating losses
amounted to R912 million for the period to 31 October 2012).
While sales prices are increasing in rand terms on the back
of a weaker rand/US dollar exchange rates and lower US
dollar-based prices, higher feedstock costs are eroding
these benefits. Sales volumes were 5% higher than the prior
year comparable period on the back of the slow recovery in
the polymers market, however, this was partially offset by
the recent road freight industrial action. This performance
was underpinned by an 8% increase in saleable production,
despite a number of prolonged scheduled maintenance outages
at a number of the polymer plants. Cash fixed costs in this
business continue to remain under pressure and during the
period, in addition to normal inflation increases,
additional maintenance outage costs were incurred compared
to the prior year comparable period due to the phasing of
scheduled maintenance outages. Our projects identified to
improve production performance are making significant
progress. The Ethylene Purification Unit (EPU5) project,
which will increase ethylene available for our polyethylene
plants, is expected to be operational in the second half of
the 2013 calendar year, while the C3 stabilisation project
will achieve beneficial operation during the middle of the
2014 calendar year.
Sasol Solvents’ business performance for the three months to
30 September 2012 remains under pressure. While production
volumes were 10% below those of the prior year comparable
period due mainly to planned maintenance outages both in
South Africa and Germany, as well as reduced production in
Germany following a demand slowdown, sales volumes were 10%
above those of the prior year comparable period resulting
from customers restocking. The economic crisis in Europe and
slowdown in the Chinese economy adversely impacted our
solvents business, resulting in our co-monomers products and
our German operations incurring losses in the first quarter.
The reduction in selling prices experienced across the
solvents product portfolio, coupled with increasing
feedstock prices, resulted in severe margin pressure. The
weaker rand did, however, provide some relief but not to the
same extent as in the prior year comparable period. Given
the current weak market conditions, we continue to focus on
our business improvement and optimisation initiatives to
improve the performance of our plants and marketing
activities.
In our other chemical businesses, the ongoing difficult
economic conditions in Europe and the US have negatively
impacted the global demand for paraffin waxes. Despite these
challenges, total wax production volumes have increased
marginally for the three months to 30 September 2012
compared to the prior year comparable period. In Hamburg,
Germany, the installation of an electricity co-generation
plant is progressing well. It is expected that this plant,
which will start-up early in the 2013 calendar year, will
yield an energy cost saving of around 16%. In Sasolburg, the
installation of an electricity generator from blow-off
nitric acid plant surplus steam was successfully
commissioned, achieving an energy cost saving of 10% in the
production of explosives. Our fertiliser and explosives
businesses have experienced challenging market conditions,
mainly related to ongoing industrial action in the mining
sector and delays in the summer rainfall planting season.
Sasol Petroleum International (SPI) is currently in the
process of appraising the Inhassoro field in Mozambique to
determine its commercial viability. We are encouraged by the
extended well test results and expect to make a decision for
development in the first half of the 2013 calendar year.
Unfortunately, the wildcat exploration well, Mupeji-1, which
was drilled in the offshore M-10 concession did not
encounter hydrocarbons and was subsequently plugged and
abandoned as a dry well. Sasol’s share of the estimated
costs is US$53 million and will be expensed. We completed
the acquisition of 1 836 square kilometres (km2) of 3D
seismic in the offshore Sofala block and are acquiring a 2
000 km 2D seismic survey in the onshore Area A block. We
continue to investigate prospects and consider development
plans in the area to support current production.
In Gabon, where we hold a 27,75% working interest, oil
production remained on track. For the quarter to 30
September 2012, we produced a total of 439 000 barrels of
oil, compared to 487 000 barrels in the prior year
comparable period. No lifting took place during September
2012 due to the suspension of two wells, however, the impact
thereof was negated by positive stock movements. We will
continue to develop this area over the next four years.
Our Canadian shale gas assets (Farrell Creek and Cypress A)
continue to remain under pressure resulting from the slow
recovery of gas prices and the related slow down in
development activities, coupled with higher depreciation. We
anticipate a continuation of the current loss position for
the 2013 financial year. At 30 September 2012, our share of
the capital expenditure on the Canadian shale gas assets
amounted to CAD93 million for the period. At that date,
there were a total of 90 wells on stream, with 19 wells
which have been drilled but not yet completed. The gas
production rate for the quarter to the end of September
averaged 127 million standard cubic feet per day (mmscf/d)
(100% gross). The cumulative year-to-date production for
these assets to 30 September 2012 was 11,9 billion standard
cubic feet (bscf) (100% gross).
Aeromagnetic surveys of the coal bed methane licences in
Botswana have been completed and the 9 core hole drilling
programme commenced at the end of November 2012.
3. Financial performance
Weaker rand increases inflationary cost pressures
A 14% weaker average rand/US dollar exchange rate (R8,36/US$
at 31 October 2012) negatively impacted cash fixed costs for
the four months ended 31 October 2012. Cash fixed costs,
excluding once-off, growth costs and the impact of exchange
rates, reflect inflationary pressure, resulting primarily
from increased labour and maintenance costs.
Increased free cash flow
Our cash flow generation from operations for the three
months ended 30 September 2012 was higher than the prior
year comparable period, mainly due to increased production
volumes and the positive impact of the weaker average
rand/US dollar exchange rate. We continue to maintain a
strong cash position, sustaining a strong balance sheet.
This, in turn, supports the funding of our capital
investment programme, as well as our progressive dividend
policy, while providing a buffer against volatility and
retaining financial flexibility in uncertain credit markets
where the cost of corporate credit is above risk free rates.
We continue to focus on strengthening working capital
management and monitoring credit exposure and counterparty
risks.
4. Projects update
We are fortunate to have a healthy portfolio of attractive
capital investment opportunities for the next ten years.
However, to execute such a large portfolio of opportunities
requires a significant amount of financial and human
resources. Therefore, with the aim of achieving maximum
benefit from our growth portfolio, we have reviewed and
prioritised the projects in our project pipeline. In
determining the prioritisation of our projects, we have
considered the financial and human resource requirements as
well as the strategic implications of each capital
investment opportunity. Taking into account the impact on
our consolidated growth portfolio, we have staggered our
growth opportunities accordingly, to sharpen our focus on
successful project execution and delivery.
US integrated GTL complex
Following the successful completion of the feasibility
studies to determine the technical and commercial viability
of an integrated, two phase 96 000bbl/d GTL and chemicals
facility in Louisiana in the United States, we have decided
to proceed with front-end engineering and design (FEED).
Total current project costs are estimated to be between
US$11 billion and US$14 billion, which are higher than
previous estimates primarily due to 30% of the fuels being
upgraded to high value chemicals, as well as higher cost
escalations due to the phasing of the project after the
ethane cracker. We expect beneficial operation to be
achieved during the 2018 and 2019 calendar years for the two
phases, respectively.
US integrated ethane cracker complex
Following the successful completion of the feasibility
studies to determine the technical and commercial viability
of a world scale 1,5 million tons per annum ethane cracker
and associated derivatives facility in Louisiana in the
United States, we have decided to proceed with FEED. Total
current project costs are estimated to be between US$5
billion and US$7 billion, which are higher than previous
estimates primarily due to increased plant capacity, the
inclusion of additional downstream derivative units and
undertaking the project without a partner. We expect
beneficial operation to be achieved during the 2017 calendar
year.
Canada GTL
The feasibility study to determine the technical and
commercial viability of a GTL facility in Western Canada was
successfully completed. In accordance with the need to
prioritise our growth portfolio, a decision was made to
phase this investment opportunity after the integrated US
GTL and ethane cracker complex. A FEED decision will,
therefore, be considered at a later stage.
Uzbekistan GTL
Our Uzbekistan GTL FEED activities are progressing well and
are expected to be completed during the second half of the
2013 calendar year. An investment decision for this project
is, amongst others, dependent on appropriate project
financing.
Good progress made with our mining replacement projects
The newly inaugurated R3,5 billion Thubelisha Shaft at the
Twistdraai Colliery in Mpumalanga, South Africa, has largely
been completed. We anticipate that all work, including
gaining access to areas around the burnt coal section, will
be finalised in the third quarter of the 2013 calendar year.
Progress on the Impumelelo and Shondoni Collieries, which
are part of Sasol Mining’s R14 billion mine replacement
programme, is progressing. Despite shaft sinking challenges
due to productivity at the Impumelelo Colliery, it is
anticipated that the project will be completed within budget
during the fourth quarter of the 2014 calendar year.
Construction of the Shondoni Colliery is progressing and we
expect that the first development section will start opening
up the underground area during the first quarter of the 2014
calendar year. Beneficial operation in respect of this
colliery is anticipated for the 2015 calendar year.
Acquisition of coal reserves at Lake DeSmet
We purchased a property at Lake DeSmet, Wyoming, in the
United States for an amount of US$31 million. The property’s
coal reserve will form part of our overall strategic
resource portfolio. However, there are no plans to develop
the resource at this time.
FT wax expansion project
Construction on the FT wax expansion project facility in
Sasolburg, South Africa, continues to progress. As reported
previously, the commissioning of the new Slurry Bed Reactor,
which is key equipment for the capacity expansion, has been
delayed until the end of the 2013 calendar year. While this
will not jeopardise the completion date of 2015 for the full
project, it will delay the first ramp up stage versus the
original schedule. The cost implications associated with the
delay will be communicated during our interim results
announcement once these costs have been finalised.
Progressing our sustainability initiatives
The construction of the R1,9 billion Sasolburg project to
produce 140 megawatts (MW) of power using natural gas is
largely completed. Commissioning activities have started and
the project should be completed ahead of schedule and below
budget. We expect that the facility will be on line and
reach full capacity before the end of December 2012, in
support of Sasol’s ambition to generate up to 60% of our
South African electricity requirements.
During the period, through Sasol New Energy (SNE), we
advanced the development of our US$246 million additional
gas-fired electricity generation in Mozambique, in
partnership with the country’s state-owned power utility
Electricidade de Moçambique at Ressano Garcia. Negotiations
of the commercial contracts have been finalised and we are
in the process of finalising the definitive agreements with
our partner and obtaining concession rights. A final funding
and investment decision has been made by our board, subject
to certain suspensive conditions.
We acquired a 30,8% share in the UK-based OXIS Energy for
GBP15 million during the period. This strategic investment
will allow us to apply our extensive experience of
commercialising and scaling up chemical processes to assist
OXIS in realising the potential associated with their
development of next generation battery technology.
Clean Fuels 2 update
The high level Clean Fuels 2 (CF2) specifications were
gazetted on 1 June 2012, and are in line with expectations.
Our latest estimates on the capital expenditure needed to
comply with the core specifications is between R10 billion
and R11 billion, attributable to both our share in the
Natref joint venture and Sasol Synfuels. These estimates are
subject to change, based on the finalisation of feasibility
studies being carried out in this regard by Natref.
Additional projects, that may be required to further
mitigate the volume and octane impact of CF2 and to restore
capacity to pre-CF2 levels, are currently being investigated
in respect of Sasol Synfuels. Based on the finalisation of
the feasibility studies and the additional projects, we
estimate additional capital expenditure to range between R2
billion and R3 billion.
We continue to engage with the South African government
(National Treasury and the Department of Energy) on cost-
recovery mechanisms and specifications to be prepared and
published by the South African Bureau of Standards.
5. Update on strategic issues
Credit rating
Our foreign currency credit rating according to Standard &
Poor’s (S&P) is BBB/Negative/A-2 and the local currency
rating is A-/Negative/A-2. The latest S&P corporate rating
on Sasol was published on 16 October 2012. Sasol was
downgraded in line with the downgrade of South Africa from
BBB+ to BBB. The downgrade of South Africa resulted
primarily from the perceived deterioration of the country’s
socioeconomic environment. Our foreign currency credit
rating according to Moody's is Baa1/stable/P-2/stable and
our national scale issuer rating is Aa3.za/P-1.za. The
Moody’s latest credit opinion on the group was published on
30 March 2012. Their rating was reaffirmed on 1 October
2012.
The credit ratings reflect our diversified and highly
profitable domestic activities along the energy value chain,
as well as our current strong financial risk profile and
prudent financial policies.
US dollar bond offering
On 7 November 2012, we were very pleased to announce our
US$1 billion bond issuance. The bond, with a tenure of 10
years and a fixed coupon rate of 4,5%, was oversubscribed by
3,47 times. This coupon is the lowest US dollar fixed coupon
rate achieved by a South African domiciled corporate (non-
state owned enterprise) with this term. The proceeds from
this offering will be used for general corporate purposes,
including the funding of our capital investments.
What to expect from COP18
The outcomes of COP17, held in Durban in December 2011,
comprised a set of work programmes to allow parties to reach
agreement over a longer period of time on issues relating to
adaptation and mitigation targets, and measurement,
reporting and verification processes. With the COP18 meeting
entering its second week in Qatar, we do not anticipate that
significant decisions will be taken as the work programmes
provide for ongoing work between now and COP21, to be
convened during the 2015 calendar year.
Polymers competition enquiry
As reported previously, the South African Competition
Commission (the Commission) alleges that Sasol Chemical
Industries Limited charged excessive prices for propylene
and polypropylene in the South African market from 2004 to
2007. We continue to dispute the Commission’s allegations.
In 2010, the matter was referred by the Commission to the
Competition Tribunal. The trial was originally set down to
be heard before the Competition Tribunal from 16 July 2012
to 10 August 2012. However, as a result of an application
brought by the Commission to postpone the hearing, the trial
is now set down for 13 May to 7 June 2013.
Liquid fuels competition enquiry
The South African Competition Commission (the Commission),
referred its diesel fuel market investigation to the South
African Competition Tribunal at the end of October 2012. We
began engaging with the Commission in 2008 as part of our
group-wide competition law compliance review, which preceded
the Commission’s investigation into the liquid fuels sector.
At the time, we found no evidence to support the
Commission’s concerns of possible anti-competitive conduct
in the diesel market. Our view was informed by a rigorous
internal review process, as well as external legal opinion
and expert economic analysis.
We have reviewed the referral and do not agree with the
Commission’s allegations. We are, accordingly, defending the
matter.
Our activities in Iran
In November 2011, we announced that we had entered into
preliminary talks for a possible divestiture of our share in
Arya Sasol Polymer Company (ASPC). The plant produces
integrated ethylene and polyethylene products for export.
The products are not used in the development of petroleum or
natural gas resources or nuclear power in Iran. We continue
to engage with a number of interested parties who include
business and government stakeholders. Further announcements
will be made once sufficient progress has been made.
In October 2012, the Export-Import Regulation Office of
Iranian Trade Promotion Organization, issued an order
prohibiting the export of certain products. The list of 52
prohibited export products includes polymers. In terms of
ASPC’s business licence, they are compelled to export its
production and may not trade in the local market. Sasol and
ASPC engaged with the Iranian government in order to obtain
approval to continue exporting polymer. On 6 November 2012,
the Iranian government revised the export ban on the 52
products. Polyethylene is amongst those products on which
the restriction has been removed.
The Iranian environment, in which we operate, remains
uncertain, coupled with the devaluation of the Iranian
currency. This will potentially negatively impact our
earnings.
6. Guidance for the full year
We expect the global environment and South African economy
to maintain a modest recovery into the financial year.
However, weakening demand in Europe and lower growth in
emerging markets and the US remain a concern. In addition,
the US faces additional pressure following the aftermath of
superstorm Sandy. In South Africa, the outcome of the
governing African National Congress party’s elective
conference in Mangaung, South Africa, in December 2012
remains an area to be watched with interest.
We expect an overall solid production performance for the
2013 financial year with our production guidance remaining
unchanged:
- Sasol Synfuels’ volumes will be between 7,2 and 7,4
million tons;
- The full year average utilisation rate at ORYX GTL in
Qatar is expected to be between 80% and 90% of nameplate
capacity; and
- Full year production at ASPC in Iran will be
approximately 90% of nameplate capacity.
- Our shale gas venture in Canada will continue to show
flat volumes in line with the prior year;
As costs are incurred to improve plant stability and the
weaker rand continues to exert pressure on our South African
businesses, we expect that our normalised fixed costs will
increase above the South African producers price index (PPI)
inflation. Cost control is a specific target within our
short-term incentive scheme and, accordingly, management
continues to focus on controllable cost elements. Oil prices
are expected to remain volatile over the near term, due to
weakening demand for oil in Europe, softer growth in
emerging markets and the US, as well as stronger-than-
expected increases in supply. Expected currency and
commodity price volatility will impact the valuation of
closing balances at year end.
An update on earnings guidance will be provided once we have
a reasonable degree of certainty on the interim results for
the 2013 financial year, taking into account any adjustments
arising from our half-year reporting closure process, as
well as remeasurement effects, including the potential
impact resulting from the ASPC impairment. This potential
impairment will not have an impact on headline earnings per
share. The increased uncertainty within the Iranian
environment and the devaluation of the Iranian currency, may
further negatively impact our earnings.
The forecast financial information appearing in this update
has not been reviewed or reported on by Sasol’s external
auditors. We will release Sasol’s half-year results on
Monday, 11 March 2013.
7. Other events 2013
11 March Half-year 2013 financial results release
11 March Dividend declaration
10 June CFO letter
9 September Full-year 2013 financial results release
9 September Dividend declaration
22 November Sasol Limited Annual General Meeting
25 November CFO letter
8. Investor Relations contacts
Please feel free to contact us as follows:
- investor.relations@sasol.com
- +27 11 441 3113
The Investor Relations team:
- Raj Naidu (Analyst Contact) Executive: Investor Relations
and Shareholder Value Management
- Sam Barnfather (Financial Contact)
- Zanele Salman (Technical Contact)
Sponsor: Deutsche Securities (SA) (Pty) Ltd.
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 12 October 2012 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.
Date: 03/12/2012 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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