Sasol interim results December 2018
Turnover for the interim period shot up to R102.9 billion (2017: R88.2 billion) and earnings before interest and tax (EBIT) rose to R20.8 billion (2017: R11.8 billion). Earnings for the period attributable to owners grew to R14.7 billion (2017: R6.9 billion). In addition, headline earnings per share jumped to 2 325 cents per share (2017: 1 767 cents per share).
Declaration of cash dividend number 79
An interim gross cash dividend of South African 590 cents per ordinary share (31 December 2017: 500 cents per ordinary share) has been declared for the six months ended 31 December 2018. The cash dividend is payable on the ordinary shares and the Sasol BEE ordinary shares. The board is satisfied that the liquidity and solvency of the company, as well as capital remaining after payment of the dividend is sufficient to support the current operations for the ensuing year. The dividend has been declared out of retained earnings (income reserves).
Business performance outlook - improved production performance and continuation of cost focus
The current economic climate continues to remain highly volatile and uncertain. While oil price and foreign exchange movements are outside our control and may impact our results, our focus remains firmly on managing factors within our control, including volume growth, cost optimisation, effective capital allocation, focused financial risk management and maintaining an investment grade credit rating.
We expect an overall improved operational performance for the year ending 30 June 2019, with:
*SSO maintaining post shutdown run-rates, targeting the upper-end of 7.5 to 7.6 million tons;
*Liquid fuels sales volumes of approximately 57 to 58 million barrels in line with our previous market guidance;
*Base Chemicals sales volumes, excluding US produced products, to be 1% lower for the financial year;
*Performance Chemicals annual sales volumes to be between 1% to 2% higher (excluding LCCP);
*Gas production volumes from the Petroleum Production Agreement (PPA) in Mozambique to be between 114 bscf to 118 bscf;
*ORYX GTL to achieve an average utilisation rate of 90% due to a leak discovered in December 2018 in the waste heat boiler of one of the reformer reactors. We therefore expect to have an extended shutdown to repair the waste heat boiler;
*Normalised cash fixed costs to remain in line within our inflation assumption of 6%;
*Capital expenditure, including capital accruals, of R52 billion for 2019 and R30 billion for 2020 as we progress with the execution of our growth plan and strategy. Capital estimates may change as a result of exchange rate volatility and other factors;
*Gearing and net debt to EBITDA will be managed within our board approved levels of between 45% and 49% and 2.0 times and 2.3 times respectively;
*Rand/US dollar exchange rate to range between R13.85 and R14.50; and
*Average Brent crude oil prices to remain between USD60/bbl and USD65/bbl.