SECUNDA – Sasol released production results for the year ending 30 June 2016 on 12 September.
The Sasol Limited Board has declared a final gross dividend of R9-10 per share, 21 per cent lower compared to the prior year.
“We are excited to be taking over as Sasol’s joint presidents and chief executive officers,” said Mr Bongani Nqwababa, joint president and chief executive officer, Sasol Limited.
“We have been working together over the last six months to clearly define how we will lead Sasol, address the challenges the company is facing and pursue the exciting opportunities ahead.
“Sasol’s global operations continue to perform well, with our Secunda operations reporting record production volumes.
“Our cost reduction and cash savings initiatives are exceeding their targets, which places us on a sound footing as we gear up our balance sheet to complete the world-scale, company-changing investment in Louisiana in the US.”
Solid operational performance across most of the value chain and record production volumes were recorded at Secunda Synfuels Operations.
Normalised sales volumes of performance chemicals are up 1,8 per cent, chemicals are down 2,6 per cent and liquid fuels remained flat at 2 per cent up on market guidance.
With regards to the Business Performance Enhancement Programme, this initiative delivered sustainable actual cost savings of R4,5bn as well as an updated target exit run rate of R5,4bn by 2018.
The Response Plan for cash savings exceeded expectations with R28bn cash savings delivered for the year, which is R12bn above 2016 target.
There was an update in the sustainable savings target to R2,5bn by 2019, which is up by R1bn
The Lake Charles Chemicals Project is 50 per cent complete and Sasol is addressing challenges with projection execution and significantly sharpened focus on cost and schedule delivery, following the increase in project cost to US$11bn.
Headline earnings per share down only 17 per cent to R41,40, despite an average 25 per cent decline in Rand oil prices.
Earnings attributable to shareholders decreased by 55 per cent to R13,2 billion from R29,7 billion in the prior year.
Headline earnings per share (HEPS) decreased by 17 per cent to R41-40 and earnings per share (EPS) decreased by 56 per cent to R21-66 compared to the prior year.
Although commodity chemical prices were lower due to depressed oil prices, there was still strong demand and robust margins in certain key markets.
The current economic climate remains volatile and uncertain, as is clear from a statement received from Sasol Limited.
“While the outcome of the United Kingdom referendum regarding its exit of the European Union, adds a further element of uncertainty and downside risk to the global economic outlook, we expect moderate global growth to be maintained, with advanced economies generally performing better than commodity- and oil-exporting nations.
In the short-term, high oil inventory levels are expected to continue weighing on the market, but as more evidence emerges of lower non-OPEC production, the oil price cycle is likely to turn higher.
“The extent and timing of this upturn remains unpredictable.
“Although the Rand showed some resilience in recent months, it is believed that the currency still faces a number of near-term depreciation risks as the possibility for a sovereign credit downgrade has not been eliminated, domestic growth prospects remain challenging, and emerging market sentiment is still fragile.
“As oil price and foreign exchange movements are outside our control, our focus remains firmly on managing factors within our control, including volume growth, cost optimisation, project execution, effective capital allocation and cash conservation.”
The full earnings release, the annual financial statements and supplementary information for the financial year ended 30 June 2016, prepared in accordance with International Financial Reporting Standards have been posted on the Investor Centre on the Sasol website at https://www.sasol.com.
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