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SOL - Sasol Limited - Sasol Limited financial results for the year ended 30
June 2010
Sasol Limited
(Incorporated in the Republic of South Africa)
Registration number 1979/003231/06
JSE NYSE
Share code: SOL SSL
ISIN code: ZAE000006896 US8038663006
("Sasol" or "the company")
Sasol Limited financial results for the year ended 30 June 2010
focused and energised
Earnings per share up by 17% to R26,68
Synfuels volumes up by 3,9%
Cash fixed costs reduced
Strong cash flows generated from operating activities
Total dividend up by 24% to R10,50 per share
Strong balance sheet to fund growth
Growth projects remain on track
Overview
Chief executive, Pat Davies says: "Sasol continued to deliver on its strategy
by focusing on world-class performance of our existing assets and progressing
growth opportunities that are based on our proprietary technology. The prompt
actions taken in response to the global economic crisis, though painful, have
resulted in a more efficient and effective organisation. Our financial
position is strong and we have the flexibility to pursue our sustainable
growth strategy with vigour. Our focus remains on optimising our businesses,
leveraging our technology and investing strategically to enhance shareholder
returns on a sustainable basis."
Earnings attributable to shareholders for the year ended 30 June 2010
increased by 17% from R13,6 billion in the previous financial year to R15,9
billion, while earnings per share and headline earnings per share increased by
17% to R26,68 and by 5% to R26,57, respectively, over the same period.
Operating profit of R23,9 billion declined marginally by 3% compared with the
previous financial year. Operating profit was positively impacted by improved
production volumes, higher average crude oil prices (average dated Brent was
US$74,37/barrel in 2010 compared with US$68,14/barrel in 2009) and chemical
product prices. A 16% stronger average rand/US dollar exchange rate
(R7,59/US$1 in 2010 compared with R9,04/US$1 in 2009), however, outweighed the
benefits realised from the oil price. The average crude oil price achieved
during the previous financial year was positively impacted by the effect of
the oil hedges which resulted in a net gain of R5,1 billion. Similar oil
hedges were not entered into during the financial year under review.
The operating profit in 2010 was not affected by large once-off charges
compared with the previous financial year. The previous year`s once-off
charges included competition related administrative penalties of R3,9 billion
and Sasol Inzalo share-based payment expenses of R3,2 billion. The 2010
financial year includes a much lower Sasol Inzalo share-based payment expense
of R824 million.
The decrease in the effective tax rate is as a result of the absence of
competition related administrative penalties and lower share-based payment
expenses compared with the prior year, both of which are not deductible for
tax.
Cash flow from operating activities was R27,3 billion compared with R48,2
billion of the previous year. While cash flow generated by the existing
businesses was strong, working capital increased from a working capital ratio
of 15,3% (expressed as a ratio of turnover) compared with the previous year`s
ratio of 11,2% as a result of price and volume effects. The group`s growth
plans remained on track during the 2010 financial year, resulting in capital
expenditure of R16,1 billion for the year.
Chief financial officer, Christine Ramon says: "Our dedicated focus on
operational efficiency, while maintaining strict cost discipline, has
delivered results.
We have been able to achieve cash fixed costs savings of R1 billion for the
year, resulting in a reduction in cash fixed costs. The initiatives we have
embarked on support the focus of our businesses to deliver sustainable
performance through the cycles. Our growth plans remain on track and we will
actively pursue our capital investment opportunities in the forthcoming year,
where we estimate capital expenditure to be in the region of R19 billion. We
continue to plan carefully for an economic recovery, albeit volatile. The
strength of our balance sheet and healthy cash flows position us well to
respond to opportunities and challenges that the current environment
presents."
Existing assets deliver results
South African energy cluster
Sasol Mining - low US dollar coal prices depress operating profit
Operating profit of R815 million was 49% lower than the previous year mainly
as a result of lower US dollar coal prices combined with a strong rand/US
dollar exchange rate and increased Project Mafutha pre-feasibility costs. This
was partially offset by higher Synfuels and Infrachem coal prices, increased
production volumes due to operational efficiencies achieved during the year
and lower costs per unit.
Sasol Gas - improved gross margin on the back of higher sales volumes
Operating profit increased by 2% to R2 479 million compared with the previous
year. Although gas prices decreased, the effect thereof was negated as sales
volumes increased resulting in a higher margin.
Sasol Synfuels - improved plant stability results in increased production
volumes
Sasol Synfuels` operating profit decreased by 48% to R13 175 million compared
with the previous year. Production volumes were 3,9% higher than the previous
year as a result of improved plant stability. Unit cash costs, reflected a
5,8% reduction mainly as a result of capitalising shutdown and major
inspection costs. However, the decline in operating profit resulted largely
from stronger rand/US dollar exchange rates, which were partially offset by
higher average oil prices. In addition, the operating profit in the prior year
included a gain of R4 904 million relating to the oil hedge.
Sasol Oil - increased sales volumes
Sasol Oil recorded an operating profit of R1 364 million compared with an
operating loss of R351 million for the previous year. Sales volumes increased
by 7% compared with the previous year, especially due to demand by wholesalers
and overland exporters into Southern Africa. This increase was supported by
increased production as well as improved marketing margins during a period of
less volatile crude oil prices. The improvement in operating profit was
negated to some extent by the stronger rand/US dollar exchange rate and weaker
refining margins.
International energy cluster
Sasol Synfuels International (SSI) - Oryx GTL main contributor of operating
profit
SSI recorded an operating profit of R131 million compared with an operating
loss of R235 million for the previous year. This was mainly due to a once-off
loss of R771 million realised on the reduction of our economic interest in the
Escravos gas-to-liquids (GTL) project in the prior year. The Oryx GTL facility
had an unscheduled shutdown in the second quarter of 2010 as a result of a
failure in a vendor supplied air compressor unit and a planned statutory
shutdown in the fourth quarter of 2010, resulting in lower production. This,
together with a stronger rand/US dollar exchange rate and despite higher crude
oil prices, resulted in Oryx GTL delivering a lower operating profit for the
year. The Oryx GTL facility operated at 90% capacity, excluding the impact of
the planned shutdown, in the second half of 2010.
Sasol Petroleum International (SPI) - lower sales volumes
Operating profit decreased by 70% to R337 million compared with the previous
year, mainly due to lower sales volumes from the Etame oil field cluster in
Gabon, coupled with a stronger rand/US dollar exchange rate. Higher average
oil and gas prices partially negated these effects. In addition, condensate
sales volumes from Mozambique decreased by 62% compared to the previous year,
in line with expectations. Work continued according to schedule on the US$300
million expansion of the onshore gas production facilities in Pande and
Temane, Mozambique, to increase the current annual capacity of 120 million
gigajoules to 183 million gigajoules.
Chemical cluster
Sasol Polymers - increase in sales volumes
Operating profit increased by 1% to R958 million compared with the previous
year, mainly due to increased sales volumes and a reduction in fixed costs
partially offset by foreign exchange translation differences. Sasol Polymers
reorganised its South African structure, with a focus of cutting costs and
improving productivity. Benefits from these turnaround plans have already
started to bear fruit, with an increase in sales margins and reductions in
costs during the latter part of the financial year. Sasol Arya Polymer Company
continued to ramp up its production during the course of the year and ended
with an average capacity utilisation of 65% for the year, contributing R771
million to Sasol Polymers operating profit.
Sasol Solvents - improved sales volumes
Operating profit increased by 133% to R1 154 million compared with the
previous year due to improved sales volumes on the back of higher production.
Stronger margins and a reduction in cash fixed costs further contributed to
the increase in operating profit, which was partially offset by the strength
of the rand against the US dollar.
Sasol Olefins & Surfactants (Sasol O&S) - improved margins as market demand
recovers
Sasol O&S recorded an operating profit of R2 492 million compared with an
operating loss of R160 million in the previous year. The improvement in the
operating profit is mainly as a result of improved margins as the demand in
the market recovered. The positive effect of the turnaround plan has been
partially offset by negative foreign exchange impacts. The 2010 financial year
includes a partial reversal of the impairment of the Sasol Italy assets
amounting to R348 million, endorsing the positive outlook for the business in
future.
Other chemical businesses - European wax business and the fertiliser business
make a positive contribution
Other chemical businesses recorded an operating profit of R892 million
compared with an operating loss of R3 525 million for the previous year. The
prior year included once-off items such as the European Commission
administrative penalty relating to Sasol Wax GmbH, the administrative penalty
payable by Sasol Nitro to the South African Competition Commission and the
impairment and closure provisions related to the Phalaborwa operations. The
negative effect of the stronger rand/US dollar exchange rate and the slower
than expected recovery in the US wax market, was negated by the improved sales
volumes in the European wax market. The fertiliser business also reported
improved product margins during 2010.
Competition law compliance
Regarding competition law, we continue to focus on enhancing Sasol`s
competition law compliance processes and systems throughout the group.
There are matters that remain subject to investigation. The South African
Competition Commission (the Commission) has initiated investigations in
respect of some of the industries in which Sasol participates, including the
South African piped gas, coal mining, petroleum, fertiliser, wax and polymer
industries.
During 2010, we received two notices of non-referral in regard to
investigations that were conducted by the Commission into the South African
candle wax industry. We are not aware of any further investigations by the
Commission in respect of this industry.
On 5 July 2010, Sasol Nitro, a division of Sasol Chemical Industries Limited,
concluded a settlement agreement with the Commission. The settlement agreement
reached is in full and final settlement of the alleged contraventions of
excessive pricing and exclusionary practices arising from complaints lodged
with the Commission by Nutri-Flo and Profert. Sasol Nitro did not, as part of
the settlement, admit to having committed any excessive pricing or
exclusionary conduct. The Commission is of the view that the settlement, which
involves a structural solution and several changes to Sasol Nitro`s fertiliser
business model, will address their competition concerns. As a result, no
administrative penalty was imposed. The Competition Tribunal (the Tribunal)
confirmed the settlement agreement on 20 July 2010.
On 12 August 2010, the Commission announced that it had referred its
complaints of excessive pricing of polypropylene and propylene in the domestic
South
African market against Sasol Chemical Industries Limited (SCI) and of price
fixing in respect of polypropylene against SCI and Safripol (Pty) Limited
(Safripol) to the Tribunal for adjudication. The allegation of collusion on
prices relates to an agreement concluded between Sasol Polymers, a division of
SCI, and Safripol in 1994, which was structured at the behest of the former
Competition Board, following the formation of Polifin (the Sasol/AECI joint
venture) in 1994. The agreement was structured to ensure Safripol`s ongoing
access to propylene supply at a market-related price. Sasol Polymers has been
liaising with the Commission in its investigation. The Commission indicated
that it is seeking an administrative penalty of 10% of SCI`s annual turnover
for each of the alleged contraventions. There is no reasonable certainty as to
whether or not SCI will be found to have contravened competition laws as
alleged, whether a penalty will be imposed and the quantum thereof if imposed.
SCI intends defending the matter before the Tribunal should an amicable
resolution of the matter with the Commission not be achieved.
On 30 October 2009, after being advised that certain provisions in a suite of
agreements concluded between Sasol Gas, Coal, Energy and Power Resources
Limited (CEPR) and Spring Lights Gas (Pty) Ltd (Spring Lights) constituted
contraventions of the Competition Act (the Act), Sasol Gas applied for
leniency in terms of the Commission`s corporate leniency policy and obtained
conditional leniency. On 20 August 2010, Spring Lights concluded a settlement
agreement with the Commission in terms of which Spring Lights acknowledged the
mentioned contraventions and agreed to pay an administrative penalty of R10,8
million. The settlement agreement was referred to the Tribunal on 1 September
2010 for confirmation, but the matter was postponed sine die to enable the
Commission to make a ruling on an exception application of Spring Lights.
We continue to interact and cooperate with the Commission in respect of the
leniency applications as well as in the areas that are subject to Competition
Commission investigations. As and when appropriate, we will make further
announcements in respect of material matters.
Sustaining Sasol into the future
Developments in the sustainable development area include the following:
In South Africa, various policy development processes are currently being
undertaken by government departments to address interdependent issues of
climate change and the security of energy supply into the economy. This
includes climate change policy on the back of pledges tabled at Copenhagen, a
potential tax on carbon emissions investigated by National Treasury and a
review of the Integrated Resource Plan (IRP) as part of energy supply policy.
The group is currently in the process of assessing the impact of these
potential changes on business.
The recordable case rate for employees and service providers, including
injuries and illnesses, was 0,51 at 30 June 2010 compared with 0,54 at 30 June
2009. We deeply regret having had eight fatalities (two of whom were service
providers) during this financial year and as a matter of urgency have renewed
our focus on safety as one of our top priorities for 2011.
The group was rated a level 4 contributor by Empowerdex in respect of our
broad-based black economic empowerment (BBBEE) procurement process. We are a
value adding enterprise meaning that for each R1,00 spent on Sasol products,
customers receive R1,25 BBBEE preferential procurement recognition. We
achieved our level 4 contributor status earlier than our targeted date of
2012.
Growth projects on track
Our strong cash flow generation has facilitated the further advancement of the
pipeline of capital projects:
In December 2009, the Project Application Report for the China coal-to-liquids
(CTL) plant was submitted to the Chinese Government for approval. We are
expecting a decision thereon in the second half of the 2011 financial year.
The feasibility study for the Uzbekistan GTL plant is expected to be completed
by the end of the second quarter of the 2011 financial year.
Detailed engineering and construction on the expansion of the wax production
facility in Sasolburg is progressing according to plan, with the first phase
of the project expected to be completed and ready for operation towards the
end of 2012.
In February 2010, the Secunda Natural Gas Growth programme at Sasol Synfuels
in
South Africa was approved by the board. The first step of this R14,2 billion
programme, which will result in a 3% increase in production volumes, has been
completed with two gas turbines delivering 200 megawatts of electricity into
the national grid.
Sasol Polymers will invest R1,9 billion in an ethylene purification unit at
its plant in Sasolburg, South Africa. The plant is expected to come on stream
in the second half of the 2013 calendar year.
Sasol Nitro will invest R0,95 billion in a replacement fertiliser granulation
unit at its plant in Secunda, South Africa. The plant is expected to come on
stream in the second half of the 2011 calendar year.
In South Africa, coal blasting and extraction of the 170 000 ton sample of
coal on Project Mafutha (a proposed greenfields CTL facility) was successfully
completed in 2010. The coal has been transported to Secunda and the coal
gasification trials are scheduled and planned for completion during the latter
half of the 2010 calendar year. However, pending clarity on the large-scale
coal gasification tests and the provision of a commercially viable carbon
capture and storage solution, this project will not progress into the
feasibility phase within the orginally envisaged timeline. More certainty
relating to the South African government`s prioritisation of the country`s
mega energy projects is expected towards the end of the 2010 calendar year.
In July 2010, SPI was jointly, with Statoil ASA and Chesapeake Energy
Corporation, awarded an onshore petroleum Technical Cooperation Permit
covering approximately 88 000 square kilometres. This permit awards the
applicants the right to study the prospectivity for shale gas in the Karoo
Basin in the central region of South Africa.
Strong balance sheet maintained
Gearing at 30 June 2010 of 1,0% (30 June 2009: negative 1,2%) remained low as
a result of improved operating results. This low level of gearing is expected
to be maintained in the short-term. At the annual general meeting of 27
November 2009, shareholders renewed the authority to buy back up to 4% of the
issued share capital for a further 12 months. No shares were repurchased
during the 2010 financial year.
Outlook* - improved operational performance for the 2011 financial year, but
cautious due to macro economic variables
While there has been some stability in global markets and it is anticipated
that this will continue, the potential sovereign debt crisis in Europe
indicates that the recovery in the global economy appears to be fragile.
Recent chemical product demand and product prices have shown some improvement
and the crude oil price has been less volatile compared with the prior year.
The strength of the rand/US dollar exchange rate remains the single biggest
external factor exerting pressure on our profitability.
Our production volumes have improved across the group through initiatives
aimed at achieving operational efficiencies and plant stability. We anticipate
that we will be able to maintain Synfuels` production volumes for the coming
year taking into account the planned one in eight years full factory shut down
during financial year 2011. Oryx is expected to perform at planned operating
rates and Arya will continue to ramp up. Our focus in the year ahead will be
to continue to contain cost inflation through the efficiency and effectiveness
of our functions. However, considering the uncertain macro economic
environment and our assumptions in respect of crude oil and product prices,
weaker refining margins as well as the stronger rand/US dollar exchange rate,
we are cautious on the outlook for the year ahead. The current volatility and
uncertainty of global markets make it difficult to be more precise in this
outlook statement.
The board has decided to increase the final dividend given the increase in
earnings for the past year and taking into account the overall improved market
and economic conditions, together with the ongoing strength of our financial
position and current capital investment plans. This approach is consistent
with our recently announced progressive dividend policy and track record of
dividend growth as a key component of adding shareholder value.
* In accordance with standard practice, it is noted that this information has
not been reviewed or reported on by the company`s external auditors.
Acquisitions and disposals of businesses
With effect from 30 September 2009, Sasol O&S disposed of its inorganics
business in Italy for a consideration of e0,6 million.
With effect from 24 November 2009, SPI acquired a participation right in the
Sofala and M-10 Blocks in Mozambique for a purchase consideration of US$7,4
million.
Subsequent events
On 5 July 2010, Sasol Nitro, a division of Sasol Chemical Industries Limited,
concluded a settlement agreement with the Competition Commission of South
Africa. This agreement was subsequently confirmed by the Competition Tribunal
on 20 July 2010 and includes the divestiture of five regional fertiliser
blending operations.
On 12 August 2010, the Commission announced that it had referred its
complaints of excessive pricing of polypropylene and propylene in the domestic
South African market against SCI and of price fixing in respect of
polypropylene against SCI and Safripol to the Tribunal for adjudication.
(Refer to competition law compliance matters above.)
On 20 August 2010, Spring Lights concluded a settlement agreement with the
Commission in terms of which Spring Lights acknowledged the mentioned
contraventions and agreed to pay an administrative penalty of R10,8 million.
The settlement agreement was referred to the Tribunal on 1 September 2010 for
confirmation but the matter was postponed.
On 24 August 2010, SPI and Petronas announced the joint assignment of a 15%
participating interest in the offshore M-10 Block, in Mozambique to Empresa
Nacional de Hidrocarbonetos (ENH), the Mozambique national hydrocarbon
exploration company. This results in an equity split in the M-10 Block of a
42,5% participating interest to each of SPI and Petronas with the remaining
15% to be held by ENH.
Declaration of cash dividend number 61
A final cash dividend of South African R7,70 per ordinary share (2009: R6,00
per share) has been declared. This brings the dividend for the full year to
R10,50 per ordinary share (2009: R8,50 per share). The final 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 Friday, 8 October 2010
participate in the dividend (cum dividend)
Trading ex dividend commences Monday, 11 October 2010
Record date Friday, 15 October 2010
Dividend payment date Monday, 18 October 2010
Holders of American Depositary Receipts 1
Ex dividend on New York Stock Exchange (NYSE) Wednesday, 13 October 2010
Record date Friday, 15 October 2010
Approximate date for currency conversion Tuesday, 19 October 2010
Approximate dividend payment date Friday, 29 October 2010
All dates are approximate as the NYSE approves the record date after receipt
of the dividend declaration.
On Monday, 18 October 2010, 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 hold
dematerialised shares will have their accounts held by their CSDP or broker
credited on Monday, 18 October 2010.
Share certificates may not be dematerialised or re-materialised between
Monday, 11 October 2010 and Friday, 15 October 2010, both days inclusive.
On behalf of the board
Hixonia Nyasulu Pat Davies Christine Ramon
Chairman Chief executive Chief financial officer
Sasol Limited
10 September 2010
Sasol Limited is the world`s leader in the conversion
of coal and gas to transportation fuels and chemicals.
The preliminary financial statements are presented on a summarised
consolidated basis.
Statement of financial position
at 30 June
2010 2009
Rm Rm
Assets
Property, plant and equipment 72 523 70 370
Assets under construction 21 018 14 496
Goodwill 738 805
Other intangible assets 1 193 1 068
Investments in associates 3 573 2 170
Post-retirement benefit assets 789 716
Deferred tax assets 1 099 1 184
Other long-term assets 1 828 2 045
Non-current assets 102 761 92 854
Assets held for sale 16 86
Inventories 16 472 14 589
Trade and other receivables 20 474 17 144
Short-term financial assets 50 520
Cash restricted for use 1 841 1 247
Cash 14 870 19 425
Current assets 53 723 53 011
Total assets 156 484 145 865
Equity and liabilities
Shareholders` equity 94 730 83 835
Non-controlling interest 2 512 2 382
Total equity 97 242 86 217
Long-term debt 14 111 13 615
Long-term financial liabilities 75 143
Long-term provisions 7 013 5 729
Post-retirement benefit obligations 4 495 4 454
Long-term deferred income 273 297
Deferred tax liabilities 10 406 9 168
Non-current liabilities 36 373 33 406
Liabilities in disposal groups held
for sale 4 65
Short-term debt 1 542 4 762
Short-term financial liabilities 357 354
Other current liabilities 20 847 20 981
Bank overdraft 119 80
Current liabilities 22 869 26 242
Total equity and liabilities 156 484 145 865
Statement of cash flows
for the year ended 30 June
2010 2009
Rm Rm
Cash receipts from customers 118 129 144 963
Cash paid to suppliers and employees (90 791) (96 776)
Cash generated by operating activities 27 338 48 187
Finance income received 1 372 2 264
Finance expenses paid (1 781) (2 168)
Tax paid (6 040) (10 252)
Dividends paid (5 360) (7 193)
Cash retained from operating activities 15 529 30 838
Additions to non-current assets (16 108) (15 672)
Acquisition of businesses - (30)
Cash obtained on acquisition of
businesses - 19
Disposal of businesses - 3 486
Acquisition of investments in associate (1 248) (524)
Other net cash flows from investing
activities 652 203
Cash utilised in investing activities (16 704) (12 518)
Share capital issued 204 1 154
Share repurchase programme - (1 114)
Contributions from non-controlling
shareholders 9 406
Dividends paid to non-controlling
shareholders (318) (583)
(Decrease)/increase in long-term debt (2 567) 755
Decrease in short-term debt (29) (1 811)
Cash effect of financing activities (2 701) (1 193)
Translation effects on cash and cash
equivalents of foreign operations (124) (870)
Movement in cash and cash equivalents (4 000) 16 257
Cash and cash equivalents at beginning
of year 20 592 4 335
Cash and cash equivalents at end of year 16 592 20 592
Income statement
for the year ended 30 June
2010 2009
Rm Rm
Turnover 122 256 137 836
Cost of sales and services rendered (79 183) (88 508)
Gross profit 43 073 49 328
Other operating income 854 1 021
Marketing and distribution expenditure (6 496) (7 583)
Administrative expenditure1 (9 451) (10 063)
Other operating expenditure (4 043) (8 037)
Competition related fines - (3 947)
Effect of crude oil hedges (87) 4 603
Share-based payment expenses (943) (3 325)
Effect of remeasurement items 46 (1 469)
Translation (losses)/gains (1 007) (166)
Other expenditure1 (2 052) (3 733)
Operating profit 23 937 24 666
Finance income 1 332 1 790
Share of profits of associates (net of
tax) 217 270
Finance expenses (2 114) (2 531)
Profit before tax 23 372 24 195
Taxation (6 985) (10 480)
Profit for the year 16 387 13 715
Attributable to
Owners of Sasol Limited 15 941 13 648
Non-controlling interest in subsidiaries 446 67
16 387 13 715
Earnings per share Rand Rand
Basic earnings per share 26,68 22,90
Diluted earnings per share2 26,54 22,80
1 Comparative amounts were reclassified for consistency, which resulted in R1
013 million being reclassified from other expenses to administrative
expenditure.
2 Diluted earnings per share are calculated taking the Sasol Share Incentive
Scheme and Sasol Inzalo share transaction into account.
Statement of comprehensive income
for the year ended 30 June
2010 2009
Rm Rm
Profit for the year 16 387 13 715
Other comprehensive income
Effect of translation of foreign
operations (802) (2 485)
Effect of cash flow hedges 13 (497)
Investments available-for-sale 4 -
Tax on other comprehensive income 8 101
Other comprehensive income for the year
net of tax (777) (2 881)
Total comprehensive income for the year 15 610 10 834
Attributable to
Owners of Sasol Limited 15 171 10 796
Non-controlling interests in
subsidiaries 439 38
15 610 10 834
Statement of changes in equity
for the year ended 30 June
2010 2009
Rm Rm
Opening balance 86 217 78 995
Shares issued during year 204 1 154
Repurchase of shares - (1 114)
Share-based payment expenses 880 3 293
Disposal of businesses - 425
Change in shareholding of subsidiaries 9 406
Total comprehensive income for the year 15 610 10 834
Dividends paid (5 360) (7 193)
Dividends paid to non-controlling
shareholders in subsidiaries (318) (583)
Closing balance 97 242 86 217
Comprising
Share capital 27 229 27 025
Share repurchase programme (2 641) (2 641)
Sasol Inzalo share transaction (22 054) (22 054)
Retained earnings 85 463 74 882
Share-based payment reserve 6 713 5 833
Foreign currency translation reserve 137 939
Investment fair value reserve 5 2
Cash flow hedge accounting reserve (122) (151)
Shareholders` equity 94 730 83 835
Non-controlling interest in subsidiaries 2 512 2 382
Total equity 97 242 86 217
Salient features
for the year ended 30 June
2010 2009
Selected ratios
Return on equity % 17,9 17,0
Return on total assets % 16,9 18,7
Operating margin % 19,6 17,9
Finance expense cover times 14,3 12,3
Dividend cover times 2,6 2,8
Share statistics
Total shares in issue million 667,7 665,9
Treasury shares (share million 8,8 8,8
repurchase programme)
Weighted average number of
shares million 597,6 596,1
Diluted weighted average number
of shares million 615,5 614,0
Share price (closing) Rand 274,60 269,98
Market capitalisation Rm 183 350 179 780
Net asset value per share Rand 159,00 141,14
Dividend per share Rand 10,50 8,50
- interim Rand 2,80 2,50
- final Rand 7,70 6,00
Other financial information
Total debt (including bank
overdraft)
- interest bearing Rm 15 047 17 814
- non-interest bearing Rm 725 643
Finance expense capitalised Rm 58 34
Capital commitments Rm 46 497 25 309
- authorised and contracted Rm 31 553 22 492
- authorised, not yet
contracted Rm 35 769 17 038
- less expenditure to date Rm (20 825) (14 221)
Guarantees and contingent
liabilities
- total amount Rm 22 003 29 545
- liability included in the
statement of financial position Rm 10 288 12 795
Significant items in operating
profit
- employee costs Rm 15 798 17 532
- depreciation and amortisation
of non-current assets Rm 6 712 6 245
- operating lease charges Rm 1 015 1 111
- share-based payment expenses Rm 943 3 325
Directors` remuneration Rm 59 50
Share options granted to
directors - cumulative 000 914 946
Share appreciation rights with
no performance targets granted
to directors - cumulative 000 215 215
Share appreciation rights with
performance targets granted to
directors - cumulative 000 43 -
Medium term incentive rights
granted to directors -
cumulative 000 10 -
Sasol Inzalo share rights
granted to directors -
cumulative 000 50 75
Effective tax rate1 % 29,9 43,3
Number of employees number 33 339 33 544
Average crude oil price - dated
Brent US$/barrel 74,37 68,14
Average rand/US$ exchange rate 1US$ = Rand 7,59 9,04
Closing rand/US$ exchange rate 1US$ = Rand 7,67 7,73
1 Decrease in effective tax
rate as a result of the absence
of competition related
administrative penalties and
lower share-based payment
expenses, both of which are not
deductible for tax.
Reconciliation of headline
earnings Rm Rm
Profit for the year
attributable to owners of Sasol
Limited 15 941 13 648
Effect of remeasurement items (46) 1 469
Impairment of assets 110 458
Reversal of impairment (365) -
Loss on disposal of business 5 -
Profit on disposal of associate (7) -
(Profit)/loss on disposal of
assets (3) 761
Scrapping of non-current assets 156 234
Write off of unsuccessful
exploration wells 58 16
Tax effects and non-controlling
interests (19) 35
Headline earnings 15 876 15 152
Remeasurement items per above
Mining 1 3
Gas - 4
Synfuels 58 137
Oil 10 (3)
Synfuels International 4 777
Petroleum International 108 18
Polymers 14 (1)
Solvents 58 158
Olefins & Surfactants (344) 106
Other chemical businesses 21 246
Nitro 26 219
Wax (5) 27
Infrachem (1) -
Merisol 1 -
Other businesses 24 24
Remeasurement items (46) 1 469
Headline earnings per share Rand 26,57 25,42
Diluted headline earnings per
share Rand 26,44 25,25
The reader is referred to the definitions contained in the 2009 Sasol Limited
annual financial statements.
Segment report
for the year ended 30 June
Turnover Business unit Operating profit
R million analysis R million
2009 2010 2010 2009
South African energy
cluster
103 358 95 538 17 808 28 684
8 297 7 863 Mining 815 1 593
5 666 5 371 Gas 2 479 2 424
37 701 33 893 Synfuels 13 175 25 188
51 694 48 411 Oil 1 364 (351)
- - Other (25) (170)
International energy
cluster
5 166 3 967 468 880
Synfuels
3 027 2 282 International 131 (235)
Petroleum
2 139 1 685 International 337 1 115
Chemical cluster
81 913 71 577 5 496 (2 244)
15 525 14 321 Polymers 958 946
18 115 15 765 Solvents 1 154 495
Olefins &
29 534 25 283 Surfactants 2 492 (160)
Other chemical
businesses
18 739 16 208 892 (3 525)
Other businesses*
5 209 5 420 165 (2 654)
195 646 176 502 23 937 24 666
Intercompany
(57 810) (54 246) turnover
137 836 122 256
* Includes share-based payment expenses related to the Sasol Inzalo share
transaction.
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
9 October 2009 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 under take any obligation to update or revise any of them,
whether as a result of new information, future events or otherwise.
Please note: A billion is defined as one thousand million. All references to
years refer to the financial year ended 30 June. Any reference to a calendar
year is prefaced by the word "calendar".
Registered office: Sasol Limited, 1 Sturdee Avenue, Rosebank, Johannesburg
2196PO 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
Sponsor: Deutsche Securities (SA) (Pty) Limited
Directors (non-executive): TH Nyasulu (Chairman), C Beggs*,
BP Connellan*, HG Dijkgraaf (Dutch)*, MSV Gantsho*, A Jain (Indian), GA Lewin
(Australian)*, IN Mkhize*, MJN Njeke*,
JE Schrempp (German), TA Wixley*
(executive): LPA Davies (Chief executive), KC Ramon (Chief financial officer),
VN Fakude
*Independent Lead independent director
Company secretary: NL Joubert
Company registration number: 1979/003231/06, incorporated in the Republic of
South Africa
JSE NYSE
Share code SOL SSL
ISIN code: ZAE000006896 US8038663006
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
Basis of preparation and accounting policies
The preliminary summarised consolidated financial results for year ended 30
June 2010 have been prepared in compliance with the Listings Requirements of
the JSE Limited, International Financial Reporting Standards (IFRS) as issued
by the International Accounting Standards Board (in particular International
Accounting Standard 34 Interim Financial Reporting), the AC500 Standards as
issued by the Accounting Practices Board or its successor and the South
African Companies Act, 1973, as amended.
The accounting policies applied in the presentation of the preliminary
summarised consolidated financial results are in terms of IFRS and are
consistent with those applied for the year ended 30 June 2009, except as
follows:
Sasol Limited early adopted the following standards, which except if otherwise
stated, did not have a significant impact on the financial results:
IAS 23 (Revised), Borrowing Costs (effective 1 July 2009).
IAS 24 (Amendment), Related Party Disclosures.
Various improvements to IFRSs.
These preliminary summarised consolidated 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 preliminary summarised consolidated 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 2009
On 29 June 2010, a settlement agreement between Veolia Water Systems (Veolia)
and Sasol Synfuels was signed. Sasol Synfuels have agreed to settle the claim
with Veolia by the payment of an amount of R160 million (including interest)
to Veolia. The amount has been provided for at 30 June 2010.
On 5 July 2010, Sasol Nitro, a division of Sasol Chemical Industries Limited,
concluded a settlement agreement with the Commission. The Tribunal confirmed
the settlement agreement on 20 July 2010 and no administrative penalty was
imposed. As part of the settlement agreement, the complaints on abuses of
dominance brought by Nutri-flo and Profert, upon which we have previously
reported, have been settled. A non material liability has been recognised in
this respect at 30 June 2010.
On 12 August 2010, the Commission announced that it had referred its
complaints of excessive pricing of polypropylene and propylene in the domestic
South African market against SCI and of price fixing in respect of
polypropylene against SCI and Safripol to the Tribunal for adjudication. The
Commission indicated that it is seeking an administrative penalty of 10% of
SCI`s annual turnover for each of the alleged contraventions. There is no
certainty that the turnover of SCI, which houses Sasol`s South African
chemical businesses such as Sasol Nitro, Sasol Polymers, Sasol Solvents and
Sasol Wax, rather than that of Sasol Polymers is the correct base from which
to calculate a potential administrative penalty. Further, there is no
reasonable certainty as to whether or not SCI will be found to have
contravened competition laws as alleged, whether a penalty will be imposed and
the quantum thereof if imposed. For these reasons, it is currently not
possible to make an estimate of the contingent liability and accordingly, no
provision was made at 30 June 2010.
Independent audit by the auditors
The preliminary summarised consolidated statement of financial position at 30
June 2010 and the related preliminary summarised consolidated income
statement, statements of comprehensive income, changes in equity and cash
flows for the year then ended was audited by KPMG Inc. The individual auditor
assigned to perform the audit is Mr AW van der Lith. Their unqualified audit
report is available for inspection at the registered office of the company.
e-mail: investor.relations@sasol.com
Comprehensive additional information is available
on our website: www.sasol.com
Date: 13/09/2010 07:05:04 Produced by the JSE SENS Department.
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