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SOL
SOL
SOL - Sasol - Interim financial results for the six months ended
31 December 2008
Sasol Limited
(Incorporated in South Africa)
(Registration number: 1979/003231/06)
ISIN Code: ZAE000006896
Share Code: SOL
NYSE Code: SSL
("Sasol")
Interim financial results for the six months ended 31 December
2008
Solid performance in deteriorating markets
Operating profit up 53% to R21,5 billion
Headline earnings per share up 51% to R21,92
Oil hedge cushions the impact of sharp decline in oil prices
Strong balance sheet - gearing lower at 2%
Overall group production volumes up
Oryx GTL, Arya Sasol Polymers ramp up production
Competition law compliance under review
Overview
Chief executive Pat Davies says:
"Sasol`s deleveraged balance sheet, cash flows and liquidity
position place the company in a favourable position to weather the
global economic crisis. Sasol is a solid company supported by
comprehensive compliance and risk management processes and a very
committed management team. Despite the uncertainty in global
markets, our overarching long term strategy remains unchanged: to
ensure that we prudently manage our businesses and pursue growth
projects that are in the best interests of our shareholders and
other valued stakeholders."
Earnings attributable to shareholders for the six months ended 31
December 2008 increased by 45% to R13,2 billion from R9,1 billion
in the prior year comparable period, while earnings per share and
headline earnings per share increased by 47% to R22,17 and by 51%
to R21,92, respectively, over the same period.
Operating profit of R21,5 billion was 53% higher than the prior
year comparable period. The increase in operating profit was
buoyed by higher average crude oil prices (average dated Brent was
US$84,75/barrel in 2008 compared to US$81,83/barrel in 2007) and
chemical product prices, and a 28% weakening in the average
rand/US dollar exchange rate (R8,88/US$ in 2008 compared to
R6,94/US$ in 2007). The average crude oil price achieved during
the period was cushioned by the effect of the oil hedges during
the period which resulted in a net gain of R5 064 million. The
recognition of the fair value of the oil hedges resulted in an
unrealised fair value gain of R3 334 million at the end of the
period owing to the significant decrease in crude oil prices
towards the end of December 2008. The increase in operating profit
was partially reduced by the European Commission fine on Sasol Wax
of R3 678 million (Euro318,2 million).
Cash of R30,8 billion generated by operating activities represents
a 118% increase over the prior year comparable period.
Chief financial officer Christine Ramon says:
"Sasol has a positive cash position and a strong balance sheet,
and has entered a cash conservation mode. Given that we do not
expect oil and product prices to recover in the short-term, we
believe that it is wise to plan for an extended period of
suppressed and volatile market conditions. Accordingly we have
renewed our focus on cost containment, improving operational
efficiencies, working capital improvement and capital expenditure
reprioritisation. We will adopt a flexible approach to our capital
expenditure programme and have, at this stage, reduced our capital
expenditure forecast for the next three years by approximately
40%. Importantly we are continuing with the pre-feasibility and
feasibility studies relating to our large growth projects. We are
fortunate to have many attractive growth projects from which to
choose."
Competition law compliance
As announced on 19 January 2009, Sasol is engaged in a
comprehensive group-wide review of its compliance with competition
law, has lodged a number of leniency applications with the South
African Competition Commission and is involved in settlement
discussions with the Competition Commission in respect of certain
matters pertaining to Sasol Nitro. The Competition Commission has
also announced investigations into a number of industries in which
Sasol businesses participate. Sasol is still engaged in a group-
wide review of its compliance with competition law and continues
to interact and co-operate with the Competition Commission in
respect of the subject matter of its leniency applications and
settlement discussions as well as in the areas that are subject to
Competition Commission investigations. The company is continuing
to evaluate and enhance its legal compliance controls by the
competition law compliance review and remedial steps taken in the
process. Certain aspects arising from the competition compliance
review have already been announced and, to the extent appropriate,
further announcements will be made in future.
Continued performance from our existing businesses
South African energy cluster
Sasol Mining - higher coal export US dollar sales prices achieved
Operating profit of R1 434 million was 154% higher than the prior
year comparable period, primarily due to higher coal export US
dollar sales prices, which were partially offset by lower sales
volumes to Sasol Synfuels and the termination of certain coal
supply contracts.
Sasol Gas - increased sales volumes at higher gas prices
Operating profit increased by 57% to R1 448 million compared to
the prior year comparable period as a result of increased sales
volumes at higher gas prices, partially negated by higher cash
fixed costs due to increased safety initiatives and preparation
for the construction of new compressor stations at Komatipoort.
Sasol Synfuels - decreased production volumes
Sasol Synfuels` operating profits increased by 163% to R20 562
million, despite 3,8% lower production volumes compared to the
prior year comparable period as a result of plant instability. The
increase in profits associated with higher average oil prices and
weaker exchange rates were, however, partially offset by costs
associated with the pre-feasibility of the Secunda Growth
Programme and significant feedstock price escalations. Included in
the operating profit is a gain of R4 909 million relating to the
oil hedge.
Sasol Oil - sharp decline in product prices
Sasol Oil recorded an operating loss of R1 626 million compared to
an operating profit of R2 031 million for the prior year
comparable period as a result of the sharp decline in product
prices on the back of fast falling crude oil prices which resulted
in negative stock effects and pressure on refining margins.
International energy cluster
Sasol Synfuels International (SSI) - successful production ramp up
of Oryx GTL plant
SSI reflected an operating profit of R1 072 million compared to an
operating loss of R274 million in the prior year comparable
period. This increase was mainly due to the successful ramp up in
production of the Oryx gas-to-liquids (GTL) plant and a profit of
R509 million realised on the reduction of our economic interest in
the Escravos gas-to-liquids (EGTL) Project. Sasol has retained a
10% economic interest in EGTL which is recognised as an investment
in an associate. Production at the Oryx GTL plant in Qatar has
been increasing steadily and the plant achieved an average
production of almost 22 000 barrels a day (b/d) for the six months
ended 31 December 2008. For the month of December 2008, the plant
achieved an average production of just more than 26 000 b/d.
Sasol and Chevron have reviewed and optimised their business model
for co-operation regarding their GTL ambitions and have agreed, in
future, to work together directly and on a case by case basis.
Sasol Petroleum International (SPI) - increased oil and gas sales
volumes
Operating profit increased by 224% to R1 001 million compared to
the prior year comparable period, mainly due to higher oil and gas
prices and the weakening of the rand/US dollar exchange rate, as
well as higher Etame oil and Temane gas sales volumes. Although
exploration expenditure decreased, this was partially offset by
expenditure on new business development. The operating profit
includes a gain of R155 million relating to the oil hedge.
Chemical cluster
Sasol Polymers - additional production capacity at Arya Sasol
Polymers
Operating profit increased by 123% to R1 107 million compared to
the prior year comparable period, due mainly to additional
production volumes at the Arya Sasol Polymers plant, substantially
higher margins at our Petlin joint venture in Malaysia and foreign
exchange translation gains. This increase in operating profit was
partially offset by decreasing polymer sales prices at our South
African operations in the latter part of the period.
Sasol Solvents - higher margins, however, reduced sales volumes
Operating profit increased by 146% to R1 366 million compared to
the prior year comparable period due to improved sales prices and
margins, as well as a weakening rand/US dollar exchange rate
resulting in translation gains of R556 million, partially negated
by lower sales volumes. We are in the process of reviewing, and if
necessary, restructuring the European solvents business as part of
our business improvement plan.
Sasol Olefins & Surfactants (Sasol O&S) - lower sales volumes
Operating profit decreased by 71% to R135 million compared to the
prior year comparable period, mainly as a result of reduced sales
volumes due to the economic downturn, especially in global
automotive and construction sectors. Due to its position in the
European and US markets, this business was exposed more quickly to
the deteriorating worldwide economic conditions.
Despite the general downturn due to the economic crisis, the
turnaround process has already improved the robustness of the
business. Seven plants with a total production capacity in excess
of half a million tons per annum were shut down and headcount was
reduced by approximately 300.
We remain of the view that greater shareholder value can be
unlocked by continuing to focus on the turnaround process of the
Sasol O&S business and by exploring selected group cost
optimisation and growth opportunities. While we will continue to
carefully monitor and review the performance of all assets in the
Sasol O&S portfolio, we do not intend to sell Sasol O&S at this
stage and will therefore retain and further optimise this
business.
Other chemical businesses - improved performance
Other chemical businesses recorded an operating loss of R2 741
million compared to an operating profit of R885 million for the
prior year comparable period due to the inclusion of the European
Commission fine on Sasol Wax of R3 678 million (Euro318,2
million). Excluding this once-off item, operating profit increased
by 6% compared to the prior year comparable period resulting from
improved product margins.
Sustaining Sasol into the future
Pursuing sustainable development opportunities remains a focus
area for Sasol:
- The recordable case rate for employees and service providers,
including injuries and illnesses, was 0,52 at 31 December 2008
compared to 0,50 at 30 June 2008.
- Energy-efficiency projects under construction at our operations
include the investment in power generating plants consisting of
two new open-cycle gas turbines, to be fuelled by gas otherwise
flared or wasted.
- The black public funded and cash invitations of the Sasol Inzalo
share transaction were concluded successfully in September 2008.
Preference share debt of R4,3 billion related to the funded
invitation was issued.
- Sasol group was rated level 6 by Empowerdex in respect of our
black economic empowerment (BEE) procurement process, meaning that
for each R1,00 spent on Sasol products, customers receive R0,60
BEE preferential procurement recognition.
- In support of reducing our carbon footprint we have established
a New Energy business with a focus on identifying and developing
lower carbon emission technology and renewable energy sources.
Growth projects achieving objectives
Our investment in the pre-feasibility and feasibility studies of
large capital projects has not been impacted at this stage.
Major projects advanced include:
- Our feasibility study into an 80 000 b/d coal-to-liquids (CTL)
plant in China is on track to be completed during the first half
of 2010.
- The Sasol Synfuels progressive expansion project in South
Africa, the Secunda Growth Programme, will be phased in over a
period longer than originally planned. Phase one, based on natural
gas, is in progress and is expected to increase production by 3%
by 2012 compared to the 4% to be achieved by 2010 previously
reported. Phase two of the expansion programme is still in the pre-
feasibility stage.
- In South Africa, our pre-feasibility study into developing
another inland CTL plant (Project Mafutha) near Lephalale in the
Limpopo West area with a capacity of about 80 000 b/d has gained
momentum. A memorandum of understanding has been signed with the
state-owned Industrial Development Corporation of South Africa
regarding its participation in Project Mafutha.
- In October 2008, SPI commenced seismic work on four onshore
blocks in Papua New Guinea (PNG) as part of a gas exploration
campaign in partnership with a PNG company.
- Beneficial operation has been achieved for the entire Arya Sasol
Polymers complex. This includes a 1 000 kilo tons per annum (ktpa)
ethylene cracker, a 300 ktpa low density polyethylene plant and a
300 ktpa high density polyethylene plant.
- In offshore Blocks 16/19 in Mozambique, two exploration wells
were successfully drilled in the period October 2008 to January
2009. Both wells were found to be gas-bearing, however due to
technical complexity, a significant amount of follow-up work will
be required to assess the commerciality of the discoveries.
Cash conservation and targeted gearing range lowered
Gearing decreased from 20,5% at 30 June 2008 to 2,3% at 31
December 2008, primarily due to the suspension of the share
repurchase programme and entering a cash conservation mode. In
response to the global economic crisis, we have lowered our
targeted gearing (net debt to equity ratio) from the previous
range of 30% - 50% to 20% - 40%. The deleveraged financial
position at 31 December 2008 positions the group well to execute
its medium-term capital expenditure programme given uncertain
credit markets.
During the current period, the company repurchased a total of
3 216 769 Sasol ordinary shares at an average price of R346,45 per
share. Total shares repurchased since the inception of the
programme in March 2007 represents about 6,4% of the issued share
capital at 31 December 2008, excluding the shares issued in terms
of the Sasol Inzalo share transaction. 31 500 000 ordinary shares
of the repurchased shares were cancelled during the period for a
total value of R7,9 billion. 8 809 889 Sasol ordinary shares
remain held by Sasol Investment Company (Pty) Limited. At the
Annual General Meeting of 28 November 2008, shareholders renewed
the authority for up to 15 months to buy back up to 4% of the
issued share capital of the company.
Profit outlook* - reduction in earnings for the full 2009
financial year
In line with the sharp downturn in worldwide chemical markets, we
expect our chemical businesses to be significantly weaker in the
second half of the year compared to the first six months, in
contrast to our 2008 performance.
Taking into account the overall deterioration in market
conditions, with significantly lower than expected crude oil and
product prices, as well as lower product demand, partially negated
by a weakening in the rand/US dollar exchange rate, the crude oil
hedges and increased production volumes at Arya and Oryx, the
earnings for the financial year to 30 June 2009 are expected to
reflect a reduction compared to the 2008 financial year. The
current volatility and uncertainty of global markets makes it
difficult to be more precise in this outlook statement.
The board considered it prudent to reduce the interim dividend
given the volatility and uncertainty in the current economic
climate in the interests of the company`s growth strategy and the
preservation of long-term shareholder value.
At this stage we expect to maintain our dividend policy within the
targeted range of 2,5 times to 3,5 times annual earnings cover.
However, consideration will be given to a capitalisation award for
the final dividend.
*In accordance with standard practice, it is noted that this
information has not been reviewed or reported on by the Company`s
auditors.
Acquisitions and disposals of businesses
In July 2008, Exel Petroleum (Pty) Limited acquired the remaining
50,1% of Exelem Aviation (Pty) Limited for a purchase
consideration of US$1,7 million.
With effect from 23 December 2008, SSI reduced its economic
interest in the Escravos GTL Project in Nigeria for a
consideration of US$360 million, retaining a 10% economic
interest.
Subsequent events
On 7 January 2009, Sasol Wax settled the amount of Euro318,2
million payable to the European Commission in respect of the fine
imposed due to anti-competitive activities. Sasol has appealed the
quantum of this fine.
On 4 February 2009, Mr MJN Njeke was appointed as a non-executive
director of Sasol Limited as well as a member of the Audit
Committee.
On 27 February 2009, Sasol together with its partners agreed with
lenders to repay the Oryx GTL loan balance.
Declaration of interim cash dividend number 59
An interim cash dividend of South African R2,50 per ordinary share
(2008: R3,65 per share) has been declared. The interim cash
dividend is payable on all ordinary shares, excluding the Sasol
preferred ordinary shares.
The salient dates for holders of ordinary shares are:
Last day for trading to qualify for and Thursday, 2 April 2009
participate in the interim dividend (cum
dividend)
Trading ex dividend commences Friday, 3 April 2009
Record date Thursday, 9 April 2009
Dividend payment date Tuesday, 14 April 2009
Holders of American Depositary Receipts*
Ex dividend on New York Stock Exchange Tuesday, 7 April 2009
Record date Thursday, 9 April 2009
Date for currency conversion Wednesday, 15 April 2009
Dividend payment date Friday, 24 April 2009
* All dates are approximate as the NYSE approves the record date
after receipt of the dividend declaration.
On Tuesday, 14 April 2009, 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 have dematerialised their
share certificates will have their accounts credited on Tuesday,
14 April 2009.
Share certificates may not be dematerialised or re-materialised
between Friday, 3 April 2009 and Thursday, 9 April 2009, both days
inclusive.
On behalf of the board
Hixonia Nyasulu Pat Davies Christine Ramon
Chairman Chief executive Chief financial officer
Sasol Limited
9 March 2009
Registered office: Sasol Limited, 1 Sturdee Avenue, Rosebank,
Johannesburg 2196 PO Box 5486, Johannesburg 2000, South Africa
Share registrars: Computershare Investor Services (Pty) Limited,
70 Marshall Street, Johannesburg 2001 PO Box 61051, Marshalltown
2107, South Africa Tel: +27 11 370-7700 Fax: +27 11 370-5271/2
Directors (non-executive): TH Nyasulu (Chairman), BP Connellan*,
HG Dijkgraaf (Dutch)*, MSV Gantsho*, A Jain (Indian), IN Mkhize*,
MJN Njeke*, JE Schrempp (German)*, TA Wixley* (executive): LPA
Davies (Chief executive), KC Ramon (Chief financial officer), VN
Fakude, AMB Mokaba *Independent
Company secretary: NL Joubert
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: In this document we 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 2008 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.
Sasol Limited is the world`s leader in the conversion of coal and
gas to transportation fuels and chemicals
Segment report
Business unit analysis Turnover
Rmillion
full year half year half year
30 Jun 08 31 Dec 07 31 Dec 08
Audited Reviewed Reviewed
South African energy
cluster 104 790 45 315 64 275
Mining 7 479 3 387 4 692
Gas 4 697 2 173 3 276
Synfuels 39 616 16 987 24 456
Oil 52 998 22 768 31 851
Other - - -
International energy
cluster 3 764 1 407 3 022
Synfuels International 1 793 577 1 764
Petroleum International 1 971 830 1 258
Chemical cluster 73 696 31 804 48 682
Polymers 11 304 4 749 8 643
Solvents 17 182 7 331 10 568
Olefins & Surfactants 28 780 12 175 18 253
Other chemical businesses 16 430 7 549 11 218
Other businesses* 4 273 2 616 2 613
186 523 81 142 118 592
Intercompany turnover (56 580) (25 625) (35 474)
129 943 55 517 83 118
Business unit analysis Operating Profit
Rmillion
half year half year full year
31 Dec 08 31 Dec 07 30 Jun 08
Reviewed Reviewed Audited
South African energy
cluster 21 754 11 334 28 048
Mining 1 434 565 1 393
Gas 1 448 923 1 785
Synfuels 20 562 7 815 19 416
Oil (1 626) 2 031 5 507
Other (64) - (53)
International energy
cluster 2 073 35 383
Synfuels International 1 072 (274) (621)
Petroleum International 1 001 309 1 004
Chemical cluster (133) 2 396 6 605
Polymers 1 107 497 1 511
Solvents 1 366 556 2 382
Olefins & Surfactants 135 458 1 512
Other chemical
businesses (2 741) 885 1 200
Other businesses* (2 210) 245 (1 220)
21 484 14 010 33 816
* Includes share-based payment expense of R2 953 million related
to the Sasol Inzalo share transaction
These results and other related information are available on:
www.sasol.com
THE INTERIM FINANCIAL STATEMENTS ARE PRESENTED ON A CONDENSED
CONSOLIDATED BASIS
STATEMENT OF FINANCIAL POSITION AT
31 Dec 08 31 Dec 07 30 Jun 08
Reviewed Reviewed Audited
Rm Rm Rm
Assets
Property, plant and 68 198 54 394 66 273
equipment
Assets under construction 16 366 23 424 11 693
Goodwill 937 607 874
Other intangible assets 911 586 964
Investments in associates 2 102 586 830
Post-retirement benefit 781 532 571
assets
Deferred tax assets 1 662 808 1 453
Other long-term assets 3 360 2 408 2 631
Non-current assets 94 317 83 345 85 289
Assets held for sale 31 6 3 833
Inventories 19 190 17 028 20 088
Trade and other receivables 22 605 17 780 25 323
Short-term financial assets 4 401 239 330
Cash restricted for use 1 651 768 814
Cash 21 360 3 956 4 435
Current assets 69 238 39 777 54 823
Total assets 163 555 123 122 140 112
Equity and liabilities
Shareholders` equity 89 638 60 228 76 474
Non-controlling interest 2 142 1 759 2 521
Total equity 91 780 61 987 78 995
Long-term debt 21 224 12 687 15 682
Long-term financial 48 51 37
liabilities
Long-term provisions 5 526 3 943 4 491
Post-retirement benefit 4 976 3 992 4 578
obligations
Long-term deferred income 354 2 942 376
Deferred tax liabilities 10 247 8 657 8 446
Non-current liabilities 42 375 32 272 33 610
Liabilities in disposal - - 142
group held for sale
Short-term debt 1 833 8 671 3 496
Short-term financial 193 1 318 67
liabilities
Other current liabilities 27 044 16 971 22 888
Bank overdraft 330 1 903 914
Current liabilities 29 400 28 863 27 507
Total equity and liabilities 163 555 123 122 140 112
INCOME STATEMENT FOR THE PERIOD ENDED
half year half year full year
31 Dec 08 31 Dec 072 30 Jun 08
Reviewed Reviewed Audited
Rm Rm Rm
Turnover 83 118 55 517 129 943
Cost of sales and services (50 747) (32 042) (74 634)
rendered
Gross profit 32 371 23 475 55 309
Non-trading income 454 215 635
Marketing and distribution (4 018) (3 226) (6 931)
expenditure
Administrative expenditure (4 114) (2 986) (6 697)
Other operating expenditure (3 209) (3 468) (8 500)
European paraffin wax fine (3 678) - -
Effect of crude oil hedges 4 627 (1 319) (2 201)
Share-based payment expenses (3 044) (118) (1 782)
Effect of remeasurement 320 304 (698)
items
Translation gains/(losses) 1 501 (29) 300
Other expenditure (2 935) (2 306) (4 119)
Operating profit 21 484 14 010 33 816
Finance income 836 273 735
Finance expenses (1 321) (444) (1 148)
Share of profits of 233 121 254
associates (net of tax)
Profit before tax 21 232 13 960 33 657
Taxation (8 258) (4 393) (10 129)
Profit for the period 12 974 9 567 23 528
Attributable to
Owners of Sasol Limited 13 216 9 148 22 417
Non-controlling interest in ( 242) 419 1 111
subsidiaries
12 974 9 567 23 528
Earnings per share Rand Rand Rand
Basic earnings per share 22,17 15,05 37,30
Diluted earnings per share1 21,79 14,85 36,78
1 Diluted earnings per share is calculated taking the Sasol Share
Incentive Scheme and Sasol Inzalo Employee Trusts into account.
2 Comparative amounts were reclassified for consistency, which
resulted in R506 million being reclassified from cost of sales and
services rendered to administrative expenditure.
STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD ENDED
half year half year full year
31 Dec 08 31 Dec 07 30 Jun 08
Reviewed Reviewed Audited
Rm Rm Rm
Profit for the period 12 974 9 567 23 528
Other comprehensive income
Effect of translation of 2 073 53 3 452
foreign operations
Effect of cash flow hedges 146 (30) 261
Available-for-sale financial (3) 1 (1)
assets
Tax on other comprehensive - (4) (60)
income
Other comprehensive income 2 216 20 3 652
for the period, net of tax
Total comprehensive income 15 190 9 587 27 180
for the period
Attributable to
Owners of Sasol Limited 15 445 9 169 26 062
Non-controlling interest in (255) 418 1 118
subsidiaries
15 190 9 587 27 180
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED
half year half year full year
31 Dec 08 31 Dec 07 30 Jun 08
Reviewed Reviewed Audited
Rm Rm Rm
Opening balance 78 995 63 269 63 269
Net shares issued during 1 089 262 387
period
Repurchase of shares (1 114) (7 300) (7 300)
Share-based payment 3 004 77 1 574
expense
Disposal of business 414 - -
Acquisition of businesses - - (100)
Change in shareholding of 402 73 306
subsidiaries
Total comprehensive income 15 190 9 587 27 180
for the period
Dividends paid (5 674) (3 597) (5 766)
Dividends paid to non- (526) (384) (555)
controlling shareholders
Closing balance 91 780 61 987 78 995
Comprising
Share capital 26 957 3 890 20 176
Share repurchase programme (2 641) (10 969) (10 969)
Sasol Inzalo share (22 051) - (16 161)
transaction
Retained earnings 75 958 66 660 77 660
Share-based payment 5 544 1 043 2 540
reserve
Foreign currency 5 488 (389) 3 006
translation reserve
Investment fair value (2) 3 1
reserve
Cash flow hedge accounting 385 (10) 221
reserve
Shareholders` equity 89 638 60 228 76 474
Non-controlling interest 2 142 1 759 2 521
Total equity 91 780 61 987 78 995
STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED
half year half year full year
31 Dec 08 31 Dec 07 30 Jun 08
Reviewed Reviewed Audited
Rm Rm Rm
Cash receipts from customers 86 255 54 857 123 452
Cash paid to suppliers and (55 447) (40 743) (88 712)
employees
Cash generated by operating 30 808 14 114 34 740
activities
Finance income 1 236 504 957
Finance expenses paid (1 155) (935) (2 405)
Tax paid (5 697) (4 712) (9 572)
Dividends paid (5 674) (3 597) (5 766)
Cash retained from operating 19 518 5 374 17 954
activities
Additions to non-current assets (6 952) (4 577) (10 855)
Acquisition of businesses (53) - (431)
Cash obtained on acquisition of 19 - -
businesses
Disposal of businesses 3 487 686 693
Cash disposed of on disposal of - (31) (31)
businesses
Other net cash flows from 100 41 (220)
investing activities
Cash utilised in investing (3 399) (3 881) (10 844)
activities
Share capital issued 1 089 262 387
Share repurchase programme (1 114) (7 300) (7 300)
Contributions from non- 369 - 185
controlling shareholders
Dividends paid to non- (526) (384) (555)
controlling shareholders
Increase/(decrease) long-term 3 896 (2 014) (782)
debt
(Decrease)/increase in short- (1 758) 4 685 (350)
term debt
Cash effect of financing 1 956 (4 751) (8 415)
activities
Translation effects on cash and 271 (9) 324
cash equivalents of foreign
operations
Movement in cash and cash 18 346 (3 267) (981)
equivalents
Cash and cash equivalents at 4 335 6 088 6 088
beginning of period
Net reclassification to held - - ( 772)
for sale
Cash and cash equivalents at 22 681 2 821 4 335
end of period
SALIENT FEATURES FOR THE PERIOD ENDED
half year half year full year
31 Dec 08 31 Dec 07 30 Jun 08
Selected ratios
Return on equity % 15,9 15,0 32,5
Return on total % 14,9 11,9 26,9
assets
Operating margin % 25,8 25,2 26,0
Finance expense times 19,5 15,4 14,5
cover
Dividend cover times 9,1 4,2 2,8
Share statistics
Total shares in million 665,2 630,6 676,7
issue
Treasury shares million 8,8 37,1 37,1
(share
repurchase
programme)
Weighted average million 596,0 607,7 601,0
number of shares
Diluted weighted million 613,5 616,0 609,5
average number
of shares
Share price Rand 280,02 339,00 461,00
(closing)
Market Rm 186 269 213 773 311 959
capitalisation
Net asset value Rand 150,35 101,48 128,44
per share
Dividend per Rand 2,50 3,65 13,00
share
Other financial
information
Total debt
(including bank
overdraft)
-interest Rm 22 742 22 661 19 455
bearing
-non-interest Rm 645 600 637
bearing
Finance expense Rm 42 660 1 586
capitalised
Capital Rm 25 983 21 605 25 048
commitments
-authorised and Rm 23 489 27 095 24 457
contracted
-authorised, not Rm 18 202 14 340 17 722
yet contracted
-less Rm (15 708) (19 830) (17 131)
expenditure to
date
Guarantees and
contingent
liabilities
-total amount Rm 37 524 31 479 37 381
-liability Rm 9 874 12 931 10 730
included on the
statement of
financial
position
Significant
items in
operating profit
-employee costs Rm 8 373 6 465 14 443
-depreciation Rm 3 028 2 355 5 212
and amortisation
of non-current
assets
-share-based Rm 3 044 118 1 782
payment expenses
Effective tax % 38,9 31,5 30,1
rate1
Number of number 34 023 32 893 33 928
employees
Average crude US$/barrel 84,75 81,83 95,51
oil price -
dated Brent
Average rand/US$ 1US$ = Rand 8,88 6,94 7,30
exchange rate
Closing rand/US$ 1US$ = Rand 9,49 6,87 7,83
exchange rate
1 Increase in
effective tax
rate as a result
of the European
paraffin wax
fine and share-
based payment
expenses
which are not
deductible for
tax.
Reconciliation of headline Rm Rm Rm
earnings
Profit for the period 13 216 9 148 22 417
attributable to Owners of
Sasol Limited
Effect of remeasurement items (320) (304) 698
Impairment of assets 156 27 821
Reversal of impairment - - (381)
Profit on disposal of (509) - -
business
Profit on disposal of assets (9) (391) (440)
Loss on repurchase of - 34 34
participation rights in GTL
venture
Loss on realisation of foreign - - 557
currency translation reserve
Scrapping of non-current 42 26 107
assets
Tax effects and non- 167 7 (225)
controlling interest
Headline earnings 13 063 8 851 22 890
Remeasurement items per above
Mining (1) (3) 7
Gas 6 - 104
Synfuels 21 - 25
Oil - (26) (20)
Synfuels International (509) 34 396
Petroleum International - - (27)
Polymers (3) - (12)
Solvents 43 23 104
Olefins & Surfactants 79 6 (27)
Other chemical businesses 34 (229) 229
Nitro 30 (114) (199)
Wax 4 (118) 426
Other - 3 2
Other businesses 10 (109) (81)
Remeasurement items (320) (304) 698
Headline earnings per share - 21,92 14,56 38,09
Rand
Diluted headline earnings per 21,54 14,37 37,56
share - Rand
The reader is referred to the definitions contained in the 2008
Sasol Limited annual financial statements.
Basis of preparation and accounting policies
The condensed consolidated interim financial results for the six
months ended 31 December 2008 have been prepared in compliance
with the Listings Requirements of the JSE Limited, International
Financial Reporting Standards (IFRS) as published by the
International Accounting Standards Board (in particular
International Accounting Standard 34 Interim Financial Reporting)
and the South African Companies Act, 1973, 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 2008, except as follows:
- Sasol Limited has early adopted the following standards, except
if otherwise stated, which did not have a significant impact on
the financial results:
- IAS 27 (Amendment), Consolidated and Separate Financial
Statements.
- IFRS 1 and IAS 27 (Amendment), Cost of an Investment in a
Subsidiary, Jointly Controlled Entity or Associate.
- IFRS 3 (Revised), Business Combinations.
- IAS 39 (Amendment), Eligible Hedged Items.
- IAS 39 and IFRS 7 (Amendments), Reclassifications of Financial
Assets - Effective Date and Transition (effective 1 July 2008).
- IFRS 5 (Amendment), Non-current Assets Held for Sale and
Discontinued Operations.
- IFRIC 16, Hedges of a Net Investment in a Foreign Operation.
- IFRIC 18, Transfers of Assets From Customers.
- Various improvements to IFRSs.
These condensed consolidated interim financial results have been
prepared in accordance with the historic cost convention except
that certain items, including derivatives and available-for-sale
financial assets, are stated at fair value.
The condensed consolidated interim financial results are presented
in rand, which is Sasol Limited`s functional and presentation
currency.
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 2008
On 1 October 2008, the European Union found that members of the
European wax industry, including Sasol Wax GmbH, had formed a
cartel and violated antitrust laws. A fine of Euro318,2 million
was imposed by the European Commission on Sasol Wax, who has
appealed the quantum of the fine. The liability has been
recognised at
31 December 2008.
Flowing from the group-wide competition law compliance review
certain provisions have been made where appropriate which includes
a provision in respect of the Sasol Nitro matters (certain aspects
of the Nutriflo matter referred by the Competition Commission to
the Competition Tribunal and the phosphoric acid investigation).
Independent review by the auditors
The condensed consolidated interim statement of financial position
at 31 December 2008 and the related condensed consolidated interim
income statement, statements of comprehensive income, changes in
equity and cash flows for the six months then ended was reviewed
by KPMG Inc. The individual auditor assigned to perform the review
is Mr AW van der Lith. Their unmodified review report is available
for inspection at the registered office of the company.
Johannesburg
9 March 2009
Sponsor: Deutsche Securities (SA)(Pty) Limited
Date: 09/03/2009 07:05:08 Produced by the JSE SENS Department.
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