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Trading statement for the six months ended 31 December 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” or “the Company”)
Trading statement for the six months ended 31 December 2013
Sasol’s headline earnings per share (HEPS) for the six months ended 31
December 2013 is expected to increase by between 22% and 28%, and
earnings per share (EPS), for the same period, is expected to increase
between 0% and 6%, compared to the prior comparable period. Excluding
the impact of the impairment of our Canadian shale gas assets, EPS is
expected to increase by between 44% and 50%.
Sasol’s profitability for the first half of the 2014 financial year
benefited from a strong group-wide operational performance, with Sasol
Synfuels’ production volumes remaining stable at 3,7 million tons for
the period, despite a planned total and phased shutdown of the east
factory during September 2013. Normalised Sasol Synfuels volumes
increased by 3% on a comparable basis. Our ORYX GTL operations
continue to exceed expectations with an average utilisation rate of
94% for the period under review. The benefit of a 19% weakening of the
average rand/US dollar exchange rate and a slight improvement in
chemical prices further supported Sasol’s financial performance,
despite the average Brent crude oil price remaining relatively flat.
We expect our cost inflation for the period, normalised for the impact
of the weaker rand, to be in line with market inflation.
Based on Talisman’s announcement that it would sell its share in the
Montney shale gas assets, coupled with a further decline of conditions
in the North American gas market, Sasol undertook an evaluation of our
share in the Montney assets. We have taken the decision to impair our
Canadian gas investment by approximately R5,3 billion (CAD540
million). Notwithstanding, our investments in the Montney region
continue to provide a strategic resource and gas price hedge for our
North American downstream GTL plans.
During December 2013, Sasol signed an agreement to dispose of most of
our Sasol Solvents Germany GmbH assets. The conclusion of the sale is
dependent on certain conditions being met, including approval by the
European anti-trust authorities. An impairment of R466 million (€32
million) was recognised pertaining to the affected assets. It is
expected, once final transaction approval has been obtained, that a
loss on the disposal will be recognised during the second half of the
2014 financial year.
The disposal of our investment in Arya Sasol Polymer Company (ASPC)
was completed on 16 August 2013 and the full purchase consideration
has been received from the buyer. A final loss of R198 million has
been recognised in the first half of the 2014 financial year on the
disposal. The percentage increase in HEPS would have been higher if
ASPC had been excluded from comparative periods.
Sasol maintains a low gearing and solid financial position, supported
by continued strong cash generation from our global operations. We
remain committed to our progressive dividend policy.
We continue to focus on those factors within our control including
improved project execution, operational efficiencies, margin
improvement and cost containment. We are making good progress on our
business performance enhancement programme to ensure that Sasol
remains competitive over the long-term. Further updates on this
initiative will be communicated at our half-year end results
announcement. Our cost inflation for the 2014 financial year,
normalised for the impact of a weaker rand, is expected to be slightly
above the indicative South African producers’ price index trend.
This trading statement only deals with the comparison to the first
half of the 2013 financial year. Guidance will be provided on the full
2014 financial year results when there is a reasonable degree of
certainty in this regard.
As reported in our most recent Chief Financial Officer Letter, Sasol
adopted IFRS 10, Consolidated Financial Statements, IFRS 11, Joint
Arrangements, and IFRS 12, Disclosure of Interests in Other Entities
effective from 1 July 2013. This will change the format of the
reporting of Sasol’s financial results, but will not significantly
impact normal or headline earnings. As these standards have been
applied with retrospective effect, we will restate our comparative
financial results and financial position. Further guidance on the
restated comparatives will be provided ahead of our results
announcement for the six months ended 31 December 2013.
The financial information that this trading statement is based on has
not been reviewed or reported on by the Company's external auditors.
Sasol's financial results for the six months ended 31 December 2013
will be announced on Monday, 10 March 2014.
14 February 2014
Johannesburg
Sponsor: Deutsche Securities (SA) Proprietary Limited
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 9 October 2013 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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