| Mon 28 Oct 2019, 8:00 | | SASOL LIMITED - SOL,SOLBE1 : Audited financial results for the year ended 30 June 2019 |
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SOL,SOLBE1 : Audited financial results for the year ended 30 June 2019: https://senspdf.jse.co.za/documents/2019/jse/isse/sol/FY19Result.pdf
Audited financial results for the year ended 30 June 2019
Sasol Limited
(Incorporated in the Republic of South Africa)
(Registration number 1979/003231/06)
Sasol Ordinary Share codes: JSE: SOL NYSE: SSL
Sasol Ordinary ISIN codes: ZAE000006896 US8038663006
Sasol BEE Ordinary Share code: JSE: SOLBE1
Sasol BEE Ordinary ISIN code: ZAE000151817
("Sasol" or "the company")
Short-form announcement
Audited financial results for the year ended 30 June 2019
Earnings performance
Our foundation business delivered resilient results with a mostly strong volume and
normalised cash fixed cost performance against the backdrop of a challenging
macroeconomic environment. Our business was impacted by market and geopolitical risk,
including subdued growth in global gross domestic product (GDP).
Our gross margin percentage decreased 2% compared to the prior year driven by a softer
macro environment negatively impacting supply-demand dynamics especially in our
chemicals business. We view this as temporary as the market is expected to recover over
the short-to-medium term. Our Energy business benefitted from higher crude oil prices and
higher diesel differentials. These benefits were partly offset by weaker petrol differentials
driven by negative supply-demand fundamentals.
Cash fixed cost, excluding capital growth and the impact of exchange rates, increased by
5,7%, relative to our internal 6% inflation target. Our cost management processes remain
robust while we continue to evaluate further opportunities to embed our continuous
improvement efforts. The sustained competitiveness of our business remains top of mind.
Adjusted EBITDA(1) decreased 9% compared to the prior year due to lower chemical product
prices and higher LCCP (Lake Charles Chemicals Project) operating cost. As the LCCP
progresses through the sequential beneficial operation schedule, the costs associated with
relevant units are expensed while the gross margin contribution follows the ramp-up profile
and inventory build. We expect a closer match between margin and costs for the LCCP to be
achieved from 2020.
EBIT (Earnings before interest and tax) decreased 45% to R9,7 billion, largely due to
significant remeasurement items of R18,6 billion (US$1,3 billion) recorded in the current year
resulting from softer chemical prices as well as the higher than anticipated capital spend on
the LCCP.
Core headline earnings per share (CHEPS)(2) increased 5% to R38,13 compared to the prior
year. Headline earnings per share (HEPS) increased 12% to R30,72 per share compared to
the prior year. The increase in core headline earnings continues to reflect our cash flow
generating ability from our foundation businesses despite weaker chemicals pricing.
Key metrics 2019 2018 Change %
EBIT (R million) 9 697 17 747 (45)
Headline earnings (R million) 18 941 16 798 13
Earnings per share (Rand) 6,97 14,26 (51)
Headline earnings per share (Rand) 30,72 27,44 12
Core headline earnings per share(2) (Rand) 38,13 36,38 5
Dividend per share (Rand) 5,90 12,90 (54)
- Interim (Rand) 5,90 5,00 18
- Final (Rand) - 7,90 (100)
1 Adjusted EBITDA is calculated by adjusting EBIT for depreciation, amortisation, share-based payments, remeasurement
items, movement in rehabilitation provisions due to discount rate changes, unrealised translation gains and losses, and
unrealised gains and losses on hedging activities. This constitutes pro forma financial information and should be read in
conjunction with the full announcement.
2 Core headline earnings per share adjust the standard JSE definition of headline earnings for the impact of translation
gains arising on the translation of monetary assets and liabilities to functional currency, market-to-market valuation of
hedges, Sasol Khanyisa equity-settled share-based payments recorded in the income statement, LCCP losses during
ramp-up and provision for significant tax litigation matters. This constitutes pro forma financial information and should be
read in conjunction with the full announcement.
Net asset value 2019 2018 Change %
Total assets (R million) 469 968 439 235 7
Total liabilities (R million) (244 173) (210 627) 16
Total equity (R million) 225 795 228 608 (1)
Turnover (R million) EBIT (R million)
2018(1) 2019 2019 2018(1)
19 797 20 876 Mining 4 701 5 244
Exploration and Production
4 198 5 184 International (889) (3 683)
69 773 83 803 Energy 16 566 14 081
43 951 48 813 Base Chemicals (1 431) 918
64 887 68 296 Performance Chemicals (7 040) 7 853
52 78 Group Functions (2 210) (6 666)
202 658 227 050 Group performance 9 697 17 747
(21 197) (23 474) Intersegmental turnover
181 461 203 576 External turnover
1 Restated for the transfer of the Phenolics, Ammonia and Specialty Gases business from Performance Chemicals to Base
Chemicals.
Balance sheet management
Cash generated by operating activities increased to R51 billion compared to R43 billion in
the prior year. This was largely attributable to favourable Brent crude oil prices and the
exchange rate, together with our strong working capital performance. These benefits were
offset by softer chemical prices and losses attributable to the LCCP incurring costs with
limited corresponding returns while in ramp-up phase.
Our net cash on hand position decreased from R17,0 billion to R15,8 billion as at 30 June
2019.
Actual capital expenditure, including accruals, amounted to R56 billion. This includes R30
billion (US$2,1 billion) relating to the LCCP. The higher LCCP capital cash flows and
significant impairments recorded increased our gearing to 56,3%, which is above our
previous market guidance of 44 - 49%.
We continue to actively manage the balance sheet with the objective of maintaining a robust
liquidity position and a balanced debt maturity profile. Active balance sheet management will
remain a key ongoing focus during this peak gearing phase.
During 2019, we refinanced the US$4 billion LCCP asset-based facility in two phases,
initially by the issue of US$2,25 billion of US dollar-denominated bonds and thereafter by a
US$1,8 billion 5-year bank loan financing (with a net debt: EBITDA covenant of 3,0 times).
The US dollar bond issue was Sasol's first such issuance since the inaugural US$1 billion
10-year bond issued in 2012. The issuance comprised a US$1,5 billion 5,5-year bond and a
US$0,75 billion 10-year bond. This refinancing enabled Sasol to optimise our mix of funding
instruments between bank loans and bond market, while at the same time extending the
maturity of the debt profile from 2021 to as far out as 2028. An additional benefit of
refinancing away from asset-based security was that S 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.
Please note: One billion is defined as one thousand million, bbl - barrel, bscf - billion
standard cubic feet, mmscf -million standard cubic feet, oil references brent crude, mmboe -
million barrels oil equivalent. All references to years refer to the financial year ended 30
June. Any reference to a calendar year is prefaced by the word "calendar".
Date: 28/10/2019 08:00:00
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