| Tue 4 Sep 2001, 0:00 | | Sasol Limited - Profit Statement And Declaration O |
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DIVIDEND NUMBER 44
SASOL LIMITED
PROFIT STATEMENT AND DECLARATION OF DIVIDEND NUMBER 44
FOR THE YEAR ENDED 25 JUNE 2001
The financial statements of the Group for this financial
year have been prepared in accordance with International
Accounting Standards (IAS). Comparative figures have
been restated to conform to IAS. The effect of
adjustments is shown below. (A billion is defined as one
thousand million).
* Sales up 60% to R41 289 million.
* Operating profit up 71% to R10 773 million.
* Attributable earnings up 72% to R7 025 million.
* Acquisition of Condea earnings positive.
* Attributable earnings per share up 81% to 1 120 cents.
* Headline earnings per share up 86% to R1 236 cents.
* Total dividend per share declared increased by 45% to
320 cents.
* More than R3 billion invested in South Africa
The outstanding performance of the Group over the last
five years is the direct result of delivery of the
Group's growth strategy and the repositioning undertaken
to sustain real growth in the future. This strategy is
focused on Sasol becoming a respected global enterprise.
FINANCIAL OVERVIEW
A highly commendable performance for the year ended 25
June 2001 resulted in all major businesses achieving
record results. This performance should be seen in the
context of strong growth in sales, operating profit,
attributable earnings and capital expenditure over the
last five years.
The factors which primarily contributed to the increase
in earnings in the past year compared to the previous
year were:
* A higher oil price (up 37% to an average of US$ 26,50 a
barrel compared to the previous year), and strong
refining margins.
* A 16% weakening in the rand/dollar exchange rate.
* Strong sales volumes into both local and international
markets.
* Continuing improvement in operational stability on most
plants.
* Significant productivity and efficiency improvements,
and cost reductions, across all businesses.
Sales increased by 60% from R25 762 million to R41 289
million. In pursuit of a set strategic objective,
foreign sales reached 37% of total sales and are
confidently expected to exceed 50% in the next financial
year. Sales of chemicals by Sasol Chemical Industries
(SCI) amounted to 51% of total sales, which is also in
line with a strategic objective to increase chemical
sales to 50% of total turnover.
Operating profit of R10 773 million increased by 71% and
exceeded R10 billion for the first time. At prevailing
exchange rates, this is the second consecutive year that
operating profit has exceeded US$ 1 billion.
Renewal and cost optimisation programmes throughout all
operations are a critical part of an ongoing and
entrenched management philosophy to achieve continuous
improvement. Productivity and efficiency improvements
again contributed materially to the increase in operating
profit.
During the year, the Group completed its largest and most
significant acquisition. A Euro 1,3 billion asset and
share purchase agreement was concluded with RWE-DEA
Aktiengesellschaft f r Mineraloel und Chemie (RWE-DEA),
for that company's entire chemicals business, Condea,
with effect from 1 March 2001. Condea has since been
renamed Sasol Chemie.
It is noteworthy that the impact of this acquisition on
Group earnings was positive for the four months since 1
March 2001.
Following this pleasing addition to Sasol's business
portfolio, which provides an ideal strategic fit with
existing businesses, gearing rose to 27% at 25 June 2001.
This is in line with the financial objective to hold debt
between a range of 25% and 30% of total equity. The
higher gearing resulted in an increase of R87 million in
net interest paid during the year to R276 million.
It should be noted that R1 119 million was expended on
the Group's approved share buyback programme during the
year. To date 7% (47 074 900 shares) of issued shares
have been purchased at an average price of R51,15 per
share. There is presently no intention to trade in these
shares. If adjusted for this expenditure, gearing is
reduced to 15% of total equity.
The Group is mindful of the need to integrate and settle
Sasol Chemie successfully into SCI. Already, prospects
for Sasol Chemie are exceeding expectations. As a
result, and in support of its stated growth objectives,
Sasol is again alert to acquisition opportunities that
will add value and substance to its strategically focused
business portfolios. It is understood that suitable
opportunities can take time to materialise. The balance
sheet, forecasted future cash flows and associated
funding options provide substantial capacity for the
funding of future growth.
Highlights of the Group's financing activities were:
* Arrangement of a syndicated US$ 400 million revolving
credit facility.
* Issuing of R900 million senior secured three-year bonds
as part of a R2 billion domestic medium-term note
programme launched in June 2000.
* Issuing of a one-year non-listed commercial bond for R1
100 million, which is one of the biggest single
placements of commercial paper by a listed company in
South Africa.
* Arrangement of a Euro 470 million and USD 165 million
syndicated, multi-currency term loan and revolving credit
facility.
Earnings per share increased by 81% to 1 120 cents, and
headline earnings per share increased by 86% to 1 236
cents. The difference of 116 cents per share (R727
million after tax) relates to the amortisation of net
negative goodwill of R44 million, loss on the sale of
property, plant and equipment of R83 million as well as
the impairment of the following assets:
* The acrylonitrile (ACN) plant - R354 million.
* The Group's 50% equity interest in Sasol Fibres - R111
million.
* The chlorine plant at Umbogintwini, South of Durban -
R57 million.
* Crotonaldehyde and acid recovery plants - R82 million.
* Foreign oil producing assets - R35 million.
* Other smaller plants - R49 million.
A final dividend of 180 cents per share has been
declared. This brings the total dividend declared to 320
cents per share, which represents an increase of 45%.
DIVISIONAL CONTRIBUTION TO OPERATING PROFIT
The contribution to the operating profit of the Group was
as follows:
25 June June %
2001 2000 Increase
R-Million
Sasol Synthetic Fuels 7 871 3 999 97
Sasol Oil 1 309 808 62
Sasol Mining 577 317 82
Sasol Chemical Industries 2 199 1 603 37
Sasol Polymers 870 864 1
Sasol Solvents 501 273 84
Sasol Alpha Olefins 334 242 38
Nitrogen businesses 271 169 60
Sasol Chemie 204 - -
Other 19 55 -
(198) (89) -
11 758 6 638 77
Capital items and goodwill (985) (346) -
Total 10 773 6 292 71
SASOL SYNTHETIC FUELS (SSF)
Surging ahead on the strength of high international crude
oil price, improved yields and effective cost management
initiatives, SSF increased its operating profit by 97% to
R7 871 million.
Notwithstanding operating problems experienced during the
year on the air separation units, for which sustainable
corrective modifications are necessary and underway, SSF
continues to improve the quality of its performance year
after year. The continuing ability to innovate better
production processes, increase effectiveness and
profitability, improve safety and environmental standards
and motivate employees towards achieving challenging
targets is testimony to the status of this business.
SSF successfully completed its first full financial year
of running the new-generation Sasol Advanced Synthol
(SAS) reactors, without parallel support from the older-
generation CFB Synthol reactors. A ninth SAS reactor was
recently installed. These reactors will substantially
contribute to increased performance and output in future.
SASOL MINING
In yet another year of exceptional progress, Sasol Mining
increased its operating profit by 82% to a record
R577million. While the business benefited from higher
coal export prices, its highly effective renewal process
progressed successfully through all production and
support operations.
The higher international coal prices increased the export
contribution to operating profit to R235 million.
Exports remain integral to the business' growth
ambitions.
The renewal process has been so successful that it has
become embedded as a continuous improvement philosophy
and has spawned further improvement initiatives. These
include enhancements to key activities such as
maintenance, information management and human resources
development.
It is noteworthy that Sasol Mining was rated in the upper-
quartile, in a productivity benchmarking exercise
completed during the year, involving comparable South
African collieries.
SASOL OIL
The upward trend in the performance of Sasol Oil
continued during the past year and operating profit
increased by 62% to R1 309 million. This pleasing
performance resulted from higher refining margins,
increased sales volumes, the rand's depreciation against
the US dollar and further improved operational and
commercial efficiencies. Production and distribution
costs were controlled to well below inflation levels.
It is estimated that the market for liquid fuels declined
by 0,8% during the year. Near-African States also used
less fuel. The collapse of the Zimbabwe market was a
notable feature.
The Sasol/Total South African joint venture refining
company, National Petroleum Refiners of South Africa
(Natref) performed well for almost the entire year.
Natref has long been an exceptionally safe and productive
refinery. The most unfortunate fire that occurred near
financial year-end is regretted. Two people died and the
crude distillation unit (CDU) was damaged.
Sasol again expresses its condolences to the families of
these two persons.
The refinery is likely to return to full production in
October 2001. The impact of the incident on operating
profit was limited to the insurance excess of R80 million
for Sasol. Corrective measures to prevent a recurrence
of such an incident are being effected.
The refinery's performance was otherwise pleasing and a
92% product yield achieved was an all-time record.
Natref also achieved major improvements in energy
efficiency and reduced atmospheric emissions.
The R700 million Natref expansion project is expected to
achieve its June 2002 commissioning target. It will
enable a 22% increase in capacity.
A notable success during the year was the complete to
unleaded petrol in the form of Sasol's Formula 100 Dual
Fuel in March 2001. Motorists welcomed the Dual Fuel
launch as an innovative way to satisfy their fuel
requirements.
The long-standing Main Supply and Blue Pump agreements
with South African oil companies have prohibited the
Group from operating its own branded service station
network. These agreements expire at the end of 2003
following notice given by Sasol in 1999. The Group is
progressing with far-sighted plans to have a Sasol
branded service structure network in place by 2004.
SASOL CHEMICAL INDUSTRIES
Maintaining its excellent track record of the last four
years, SCI increased operating profit by 37% to R2 199
million.
This achievement is especially gratifying because many
divisions experienced severe margin pressure due to
continuing high oil and other feedstock prices. The
affected products included polymers, alpha olefins,
fertilisers, commercial explosives, waxes and phenolics.
The primary contributions to SCI's performance include:
* Continuing strong customer support and excellent
worldwide logistics.
* Further increases in productivity and stringent
management of operating costs.
* Higher prices for ammonia and value-added carbon and
tar products.
* Overall volume growth in sales of most products.
* The commissioning of new production capacity in South
Africa.
* The rand's depreciation against the US dollar.
Highlights and notable events during the year include:
* The acquisition of Sasol Chemie and its integration
into the existing Alpha Olefins and Solvents divisions to
form two global businesses with world-scale status and
strong market positions.
* The acquisition of the remaining 50% of Fedmis
Phalaborwa from AECI and its subsequent integration into
Sasol Agri.
* The commissioning of the third hexene train in
September 2000 at Secunda, raising annual hexene capacity
to about 200 000 tons.
* The restart of the polypropylene plant at Secunda after
the fire in February 2000. Sasol Polymers has since
consistently run the plant at above design capacity. The
division also successfully re-entered local and
international markets and emerged from its crisis with
its reputation with customers intact.
* * The commissioning of the R270 million ethyl acetate
plant at Secunda. Utilising novel Sasol developed
technology, the plant will produce 50 000 tons a year of
product, most of which will be exported.
* The sanctioning of a project to build a 150 000 tons a
year n-butanol plant in Sasolburg, using technology
licensed from Mitsubishi Chemical Corporation of Japan.
Sasol Chemie
The integration of Sasol Chemie since 1 March 2001 is
progressing according to plan. Operating profit for the
first four months to 25 June 2001 amounted to R204
million, which is pleasing considering the relatively
high feedstock prices for the same period. As mentioned
above, the effect of this commendable result, after
taking full interest on the acquisition price of Sasol
Chemie into account, is positive on the Group's earnings.
SASOL SYNFUELS INTERNATIONAL (SSI)
After several years of extensive preparatory work by SSI,
a new era of international synfuels joint ventures is now
within reach. In July 2001, approval was given for the
start of front end engineering and design for the Qatar
and Nigerian gas-to-liquids (GTL) plants.
The 50:50 Sasol/Chevron global joint venture was
finalised in October 2000. Its objective is to develop a
GTL industry, based on Sasol technology, and global
markets for GTL fuels by designing, building and
operating plants at suitable locations to manufacture and
market premium grade alternative fuels and their
associated products.
The Nigerian plant will have a daily GTL fuel and naphtha
production capacity of about 34 000 barrels and is due to
be commissioned in 2005. The Qatar plant will have a
similar total capacity and is also due to be commissioned
in 2005.
SASOL PETROLEUM INTERNATIONAL (SPI)
SPI continued its successful development of promising
exploration and production portfolios in West and
Southern Africa. The highlight of the year was the
securing of additional natural gas reserves in
Mozambique. The enlarged reserves will now enable the
Company to progress the development of the Pande and
Temane gas fields. Both fields will be developed in a
70% (Sasol) - 30% (CMH) joint venture. CMH is a
subsidiary of Mozambique's national oil company.
SPI signed a petroleum production and project agreement
in October 2000 with the government of Mozambique for the
commercial development of the Temane and Pande gas fields
and to transport natural gas to customers in Mozambique
and South Africa. All applicable agreements with the
governments of Mozambique and South Africa and Sasol's
gas partners are likely to be finalised before the end of
2001.
PROFIT OUTLOOK
Crude oil and many petrochemical and related feedstock
prices have softened. Generally, however, most are
expected to remain comparatively strong, or stable.
Most operations are targeting sales volume increases and
continuing benefits are expected from ongoing
productivity and efficiency improvement processes.
Assuming no dramatic shifts in world oil, petrochemical
and allied markets or unforeseen disruptions in key
financial markets, shareholders can anticipate modest
real earnings growth during the 2002 financial year.
Sasol intends to continue its share buyback subject to
acceptable circumstances.
STRATE
The company is scheduled to be transferred to the Share
Transactions Totally Electronic (STRATE) system of
electronic settlement on the JSE Securities Exchange,
South Africa.
Dematerialisation of the company's shares will commence
on 19 November 2001. Electronic trading in the company's
shares will commence on 10 December 2001. The first
electronic settlement will commence on 18 December 2001.
The company's share certificates will, accordingly, not
be accepted for settlement after 10 December 2001.
Details of the transfer to STRATE will be communicated to
shareholders shortly.
DECLARATION OF DIVIDEND NUMBER 44
Notice is hereby given that the directors have declared a
final dividend of 180 cents per share (2000: 137 cents
per share), in respect of the year ended 25 June 2001.
The dividend is declared in the currency of the Republic
of South Africa and will be payable to shareholders
registered in the books of the company at the close of
business on Friday, 21 September 2001. Dividend cheques
will be posted on or about 25 October 2001. Electronic
payment of dividends will take place on the same date.
By order of the board
N L Joubert
Company secretary
4 September 2001
Note: The financial results and restated comparative
figures have been audited by the external auditors, KPMG
Inc, and their audit report is available for inspection
at the registered office of the company.
Registered office Transfer
secretaries
1 Sturdee Avenue, Rosebank Mercantile Registrars
Limited
Johannesburg 2196 First National House
P O Box 5486, Johannesburg 2000 11 Diagonal Street,
Johannesburg 2001
P O Box 1053,
Johannesburg 2000
Company registration number
1979/003231/06
Incorporated in the Republic of South Africa
Directors:
P du P Kruger (Chairman) P V Cox (Deputy chairman and
chief executive) E le R Bradley WAM Clewlow BP
Connellan LPA Davies (Executive director) JH Fourie
(Erxecutive director) R Havenstein (Executive director)
S Montsi TS Munday (Executive director) JE Schrempp
(German) CB Strauss
Website
http://www.sasol.com
Consolidated balance sheet
at 25 June 2001
2000 2001 2001 2000
USD m USD m R m R m
ASSETS
2,714 3,483 Property, plant and equipment 27,925 18,798
84 134 Intangible assets 1,071 590
19 14 Township land and residential 110 125
buildings
20 (65) Goodwill (523) 141
39 105 Investments 845 265
105 101 Long-term loans and debtors 811 725
2,981 3,772 Non-current assets 30,239 20,644
532 899 Inventories 7,210 3,686
697 1,260 Trade and other receivables 10,109 4,829
73 296 Cash and cash equivalents 2,370 506
1,302 2,455 Current assets 19,689 9,021
4,283 6,227 Total assets 49,928 29,665
EQUITY AND LIABILITIES
2,560 2,772 Total shareholders' equity 22,217 17,715
15 13 Minority interest 107 106
63 620 Long-term liabilities 4,970 445
364 531 Long-term provisions 4,249 2,526
501 584 Deferred taxation 4,689 3,477
928 1,735 Non-current liabilities 13,908 6,448
152 434 Short-term loans 3,479 1,056
1 73 Short-term provisions 592 4
170 275 Taxation payable 2,206 1,176
457 925 Trade and other payables 7,419 3,160
780 1,707 Current liabilities 13,696 5,396
4,283 6,227 Total equity and liabilities 49,928 29,665
442 449 Net worth per share (cents)* 3,596 3,060
579.0 617.9 Number of ordinary shares in 617.9 579.0
issue (million)*
355 531 Capital expenditure for year 4,095 2,171
647 519 Capital expenditure authorised 4,165 4,485
* After share buyback programme
Consolidated income statement
for the year ended 25 June 2001
2000 2001 2001 2000
USD m USD m R m R m
4,101 5,399 Sales 25,762
41,289
(2,791) (3,363) Cost of sales (17,534)
(25,720
)
1,310 2,036 Gross profit 8,228
15,569
(308) (627) Selling and administrative (1,936)
expenditure (4,796)
1,002 1,409 Operating profit 6,292
10,773
31 31 Non-trading income 198
244
(61) (66) Finance costs (509) (387)
972 1,374 Net income before taxation 6,103
10,508
(318) (454) Taxation (1,994)
(3,467)
654 920 Income after taxation 4,109
7,041
1 1 Income from associates 6
11
(3) (4) Minority interest (27) (19)
652 917 Earnings attributable to 4,096
shareholders 7,025
660.8 627.3 Weighted average number of 660.8
shares (million) 627.3
Earnings per share (cents)
99 146 - attributable earnings 620
basis 1,120
106 161 - headline earnings basis 666
1,236
Dividends per share (cents)
14 18 - final (prior year) 86
137
12 17 - interim (current year) 83
140
18 22 - final (current year)* 137
180
* Declared subsequent to 25
June 2001 and has been
presented for information
purposes only. No provision
regarding this final
dividend has been
recognised.
Average rate 6.2815
7.6485
Final div prior 6.1425
7.6575
Interim div 6.6953
8.0295
Final div current 7.6575
8.0225
Statement of changes in equity
for the year ended 25 June 2001
2000 2001 2001 2000
USD m USD m R m R m
Share capital
1,405 1,408 Balance at beginning of year 1,559 1,543
3 6 Issued during year 43 16
- 355 Conversion of debentures 1,028 -
1,408 1,769 Balance at end of year 2,630 1,559
355 - Convertible debentures - 1,028
Accumulated profit
1 483 Balance at beginning of year 3,018 9
652 917 Earnings attributable to 7,025 4,096
shareholders
(160) (211) Dividends paid (1,655)
(1,025)
(85) (103) - final (prior year) (785) (521)
(75) (108) - interim (current year) (870) (504)
(10) - Net debenture interest - (62)
- 517 Transfer from other reserves 772 -
483 1,706 Balance at end of year 9,160 3,018
Translation reserve
(1,711) (2,060) Balance at beginning of year 142 74
(349) (354) Movement for year 208 68
(2,060) (2,414) Balance at end of year 350 142
355 355 General reserve 340 340
162 162 Equalisation reserve 432 432
517 517 772 772
- (517) Transfer to accumulated profit (772) -
517 - Balance at end of year - 772
Share buyback programme
- (205) Balance at beginning of year (1,290) -
(205) (146) Repurchased during year (1,119)
(1,290)
(205) (351) Balance at end of year (2,409)
(1,290)
498 710 Total shareholders' equity 9,731 5,229
Summary
1,408 1,769 Share capital 2,630 1,559
355 - Convertible debentures - 1,028
483 1,706 Accumulated profit 9,160 3,018
(2,060) (2,414) Translation reserve 350 142
355 - General reserve - 340
162 - Equalisation reserve - 432
(205) (351) Share buyback programme (2,409)
(1,290)
498 710 Total shareholders' equity 9,731 5,229
Consolidated cash flow statement
for the year ended 25 June 2001
2000 2001 2001 20
USD m USD m R m R
1,398 1,889 Cash flow from operations 14,508 8,
32 32 Investment income 253 20
(167) (70) Increase in working capital (426) (1
1,263 1,851 Cash generated by operating 14,335 7,
activities
(61) (66) Finance costs paid (509) (3
(216) (397) Taxation paid (2,972) (1
986 1,388 Cash available from operating 10,854 6,
activities
(173) (211) Dividends and debenture (1,655) (1
interest paid
813 1,177 Cash retained from operating 9,199
activities
(303) (477) Acquisition of property, plant (3,657) (1
and equipment
(52) (54) Acquisition of intangible (438) (3
assets
10 15 Long-term assets sold 112 72
(408) (1,041) Acquisition of businesses (8,350) (2
13 19 Cash acquired on acquisition of 154 89
businesses
(1) (67) Increase in investments (532) (2
13 (9) Increase in long-term loans and (25) 83
debtors
(728) (1,614) Cash utilised in investing (12,736) (4
activities
85 (437) (Increase)/decrease in funding (3,537) 46
requirements
3 6 Share capital issued 43 16
(205) (146) Share buyback programme (1,119) (1
(1) (4) Distributed to minority (27) (1
shareholders
(3) Increase/(decrease) in long- 4,097 (2
515 term liabilities
80 302 Increase in short-term loans 2,379 54
(126) 673 Cash effect of financing 5,373 (7
activities
(41) 236 Increase/(decrease) in cash and 1,836 (3
cash equivalents
Cash and cash equivalents
73 296 - at end of year 2,370 50
19 13 - arising on translation (28) -
(133) (73) - at beginning of year (506) (8
(41) 236 Increase/(decrease) in cash and 1,836 (
cash equivalents
Adoption of International Accounting
Standards
The Group adopted International Accounting Standards (IAS) for the
first time during the current financial year. The financial statements
have been prepared and presented as if they had always been prepared in
accordance with the standards and interpretations effective for the
year of first time application.
The aggregate effect of the changes in accounting policies on the
annual financial statements for the year ended 25 June 2000 is as
follows:
USD m
R m
Earnings attributable to shareholders
647 Prior year accounting policy 4,065
(3) Business combinations (17)
(10) Rehabilitation (61)
(2) Provisions and renewal (14)
(4) Post-retirement medical provision (22)
14 Post-employment benefits - pension asset 85
- Unrealised profit on futures hedging 1
10 Secondary taxation on companies (net) 58
5 30
- Effect on minority interest 1
652 International Accounting Standards 4,096
Opening balance of accumulated profit
2,103 Prior year accounting policy 12,735
5 Business combinations 30
(143) Rehabilitation (865)
29 Provisions and renewal 173
(74) Post-retirement medical provision (449)
47 Post-employment benefits - pension asset 287
1 Unrealised profit on futures hedging 6
94 Dividends declared in prior years and 569
secondary taxation on companies thereon
(41) (249)
1 Effect on minority interest 9
2,063 International Accounting Standards 12,495
