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Trading statement for the financial year ended 30 June 2013
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”)
Trading statement for the financial year ended 30 June 2013 –
Sasol’s headline earnings per share (HEPS) for the financial
year ended 30 June 2013 are expected to increase by between 20%
and 30%, and earnings per share (EPS) for the financial year
ended 30 June 2013 are expected to increase by between 7% and
17%, compared to the previous financial year.
The strong financial results, underpinned by higher than
anticipated Sasol Synfuels’ production volumes, were affected by
an impairment in respect of our Sasol Wax business related to
the Fischer-Tropsch wax expansion project (FTWEP) that is
currently under construction, as well as an impairment related
to the pending disposal of our share in Arya Sasol Polymer
Company (ASPC).
In the update from the chief financial officer released on 7
June 2013, we stated that we remained confident that, based on
our production guidance and macroeconomic indicators, we would
deliver solid operational performance and earnings for the 2013
financial year compared to the previous financial year,
excluding major once-off items. At the time, the currency and
commodity price volatility to which our earnings are
particularly sensitive, as well as any adjustments arising from
our financial year end closure process, and specifically in
regard to ASPC and FTWEP, made it difficult to be more precise
in our profit outlook statement.
Sasol’s profitability for the financial year ended 30 June 2013
compared to the previous financial year benefited from the
improved production performance of its foundation businesses,
with Sasol Synfuels’ production volumes increasing by 4% to
7,443 million tons compared to the previous financial year, as
well as the effect of a 14% weakening of the average rand/US
dollar exchange rate during the year. This has been partially
offset by a 3% lower average Brent crude oil price for the year,
depressed chemical prices and continued lower demand at our
chemical businesses. In addition, cost inflation was compounded
by a weaker rand and higher labour and maintenance costs.
We previously indicated that there was a risk of a potential
impairment of the FTWEP due to the volatile macroeconomic
environment and increased costs relating primarily to
construction delays and poor labour productivity. After a robust
reassessment of the project economics, FTWEP was impaired by
approximately R1,5 billion net of tax at 30 June 2013. All
efforts are being made to monitor and mitigate the risks
identified on the project and to improve the economics thereof.
We continue to progress towards concluding the disposal of our
share in ASPC. The investment’s fair value was further written
down by approximately R1,6 billion net of tax at 30 June 2013,
in addition to the impairment of R1 974 million net of tax
previously recognised at 31 December 2012, reducing the carrying
value of the investment over the financial year by R3,6 billion
to R2,3 billion. This is based on our assessment of the fair
value of the asset as well as the accounting requirement to
recognise operating profits of approximately R1,6 billion for
the second half of the 2013 financial year which might not be
recovered through the disposal process. Estimates at 30 June
2013 indicate that additional write offs of approximately US$100
million may still be required at the date of disposal relating
to the foreign currency translation reserve as a result of a
deteriorating Iranian environment and further operating profits
which might not be recovered through the disposal. Despite a
solid operational performance by ASPC, results for the current
financial year have been negatively impacted by the devaluation
of the Iranian currency which resulted in translation losses of
approximately R2,0 billion being recognised.
Sasol remains a strong cash generator and maintains its low
gearing and solid financial position. We continue to focus on
those factors within our control including cost containment,
operational efficiencies, margin improvements and improved
project execution. Sasol has launched a project to sustainably
reduce its cost base in the future. Further details of this
cost reduction project will be shared at Sasol’s next financial
results announcement.
Our results may be further affected by any adjustments resulting
from our year end closure process. This may result in a change
in the estimated earnings.
The financial information on which this trading statement is
based has not been reviewed or reported on by the Company's
external auditors.
Sasol's financial results for the year ended 30 June 2013 will
be announced on Monday, 9 September 2013.
1 August 2013
Sponsor: Deutsche Securities (SA) Proprietary Limited
Forward-looking statements - disclaimer
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.
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