JOHANNESBURG, Dec. 3, 2012 /PRNewswire/ --
Sasol Limited (NYSE: SSL): Highlights for the period
- Sasol Synfuels delivers a strong operational performance.
- ORYX GTL continues to achieve new production records.
- US$1 billion bond successfully
issued.
- US ethane cracker and GTL projects advanced to FEED phase.
Dear stakeholder
In the first three months of the 2013 financial year*, we have
delivered strong financial results, despite the ongoing global
economic uncertainty and labour turmoil in South Africa. The group benefited from
improvements in the operational performance of its foundation
businesses, as well as a weaker rand/dollar exchange rate. Sasol
Synfuels delivered an exceptional operational performance, despite
a planned phased maintenance outage in September 2012. The average Brent crude oil price
for the three months softened and chemical prices remained
depressed, negatively impacting our chemicals businesses, where
demand continues to remain soft. Our Canadian shale gas
assets have continued to ramp up production, and our ORYX GTL and
Arya Sasol Polymer Company ventures continue to exceed performance
expectations.
Delivering sustainable value for our shareholders underpins all
our actions. Accordingly, taking into account the financial and
human resource requirements as well as the strategic implications,
we have reviewed and prioritised the projects in our project
pipeline. Based on our review, we have staggered our growth
opportunities to sharpen our focus on successful project execution
and delivery. Furthermore, we continue to focus on those factors
within our control including cost containment, operational
efficiencies and margin improvement.
We were very pleased to announce our successful US$1 billion bond issuance. The bond, with a
tenure of 10 years and a fixed coupon rate of 4,5%, was
oversubscribed by 3,47 times. The coupon is the lowest ever
achieved by a South African non-state owned enterprise. This
reflects the confidence that investors have in our company and in
our ability to deliver value. The proceeds from this offering will
be used for general corporate purposes, including the funding of
our capital investments.
We remain confident that, based on the production guidance and
our macroeconomic assumptions, we will deliver solid operational
performance and earnings for the 2013 financial year compared to
the reported attributable earnings of R23,6 billion in the 2012
financial year, excluding the impact resulting from the Arya Sasol
Polymer Company potential impairment. This impairment will not have
an impact on headline earnings per share. The increased uncertainty
within the Iranian environment coupled with the devaluation of the
Iranian currency, may further negatively impact our earnings.
Best regards
Christine Ramon
3 December 2012
Johannesburg
*This update is based on information for the three months ended
30 September 2012, however, where
practical, information to 31 October
2012 has been included to indicate business performance.
1. Weakening macroeconomics
|
Oct
2012
YTD
|
Sept
2012
YTD
|
Sept
2011
YTD
|
% Change
Sept YTD
|
Macroeconomic indicators
|
|
|
|
|
Average
rand/US$
|
8,36
|
8,26
|
7,15
|
16%
|
Brent
crude oil (US$/b)
|
110
|
110
|
113
|
(3%)
|
Henry Hub
gas price (US$/MMBTU)
|
2,99
|
2,88
|
4,13
|
(30%)
|
Product
prices
|
|
|
|
|
SA fuel
price (US$/b)
|
132
|
129
|
135
|
(4%)
|
Ethylene
(US$/ton)
|
1
519
|
1
468
|
1
571
|
(7%)
|
Propylene
(US$/ton)
|
1
358
|
1
317
|
1
571
|
(16%)
|
Polymers
basket (US$/ton)
|
1
205
|
1
195
|
1
349
|
(11%)
|
Solvents
basket (US$/ton)
|
1
168
|
1
144
|
1
467
|
(22%)
|
Prices
reflect international commodities or baskets of commodities and are
not necessarily Sasol specific.
|
Sources: RSA Department of Energy, ICIS-LOR,
Reuters, Platts, International Energy Agency
|
Global economic conditions remained challenging in the first
quarter of our 2013 financial year, with the Euro-zone remaining in
the grip of recession and the growth in China's gross domestic product easing further.
On a more positive note, economic activity in the United States (US) improved and early
second quarter economic indicators suggest a stabilisation in the
housing market and improved consumer confidence. In South Africa, economic growth remained subdued
and below potential. Of particular concern is the labour unrest in
the country, particularly in the mining sector, which was
significantly impacted. Our own mining operations were not affected
by any strike action during the period, owing to healthy labour
relations and our ongoing corporate social investment in our
surrounding communities. As a result of these challenges,
South Africa recently received a
downgrade in its credit rating from Standard & Poor's as well
as Moody's Investor services.
Overall, the global economy continues to weather the economic
crisis. However, the outlook remains subject to a number of
downside risks, which include the ongoing European debt crisis, the
potential US "fiscal cliff", as well as the possibility of a
faster-than-expected slowdown in China's economic growth. Given these
uncertainties, it is expected that currency and oil price
volatility will persist for some time to come.
In the first quarter of the 2013 financial year, the average
rand Brent crude oil price rose by 2,7% on a quarter-by-quarter
basis. International chemical prices were weaker, due to lower
demand in downstream markets because of reduced consumer confidence
in Europe and a slowdown in the
Chinese economy.
Chemical product margins continued to be under pressure as
feedstock price increases, in line with higher oil prices,
outweighed the increases in selling prices. This has been
particularly evident in our Sasol Polymers and Sasol Solvents
businesses, which have experienced lower demand and softer product
prices on the back of weakening European macroeconomic conditions.
Our Sasol Olefins and Surfactants (O&S) business has been able
to reduce volumes, while maintaining total gross margin.
Across our operations, we remain focused on working capital
management, cost containment, production planning and optimisation
as well as margin improvement activities.
2. Improved operational performance
|
Oct 2012
YTD
|
Sept 2012
YTD
|
Sept 2011
YTD
|
%
Change
Sept YTD
|
Total
production
|
|
|
|
|
Sasol
Mining (mt)
|
13,1
|
9,6
|
9,8
|
(2%)
|
Sasol Gas
(mGJ)
|
56,8
|
41,8
|
37,3
|
12%
|
Sasol
Synfuels (kt)
|
2
426
|
1
785
|
1
590
|
12%
|
ORYX GTL*
(mbbl)
|
1,75
|
1,50
|
1,27
|
18%
|
Sasol
O&S (kt)
|
632,6
|
471,9
|
529,7
|
(11%)
|
Arya Sasol
Polymer Company* (kt)
|
143,8
|
113,9
|
80,6
|
41%
|
Canada
shale gas assets* (bscf)
|
8,1
|
5,9
|
2,9
|
100%
|
*
Sasol's share of production
|
Sasol Synfuels' year-to-date production for the three
months to 30 September 2012 was 1,8
million tons. This represents a 12% increase compared to the
prior year comparable period, which was underpinned by stable
operations of the running plant during a planned phased maintenance
outage in September 2012. Although
start-up was somewhat later than anticipated, the maintenance
outage was completed by the end of September
2012. The commissioning of new equipment during the period,
in particular the additional four gasifiers and the impact of the
17th reformer, contributed to the performance of the
plant. The strong production performance, as well as favourable
prices, supported increased operating margins for the period. These
were, however, partially offset by increased energy costs as well
as increased maintenance costs related to renewal maintenance.
Sasol Synfuels' cash unit costs remain under pressure as a result
of higher coal and natural gas feedstock prices (which are largely
internal to the group), as well as increased energy and maintenance
costs.
Due to technical and labour productivity challenges, there will
be a delay in the conversion of the two auto thermal reformers to
gas heated heat exchange reformers (GHHERs). Accordingly, the
GHHERs programme will be extended to run through to the second half
of the 2013 calendar year. As a consequence, additional capital
expenditure of around R850 million will be required. We, however,
do not anticipate this to have an impact on our production volumes
guidance of between 7,2 and 7,4 million tons for the full
2013 financial year.
Our ORYX GTL joint venture, in Qatar, continues to perform well, achieving
1,5 million barrels (mbbl) (Sasol's 49% share) cumulative
production over the three month period, which on average is above
design capacity.
The performance of our Sasol Olefins & Surfactants'
business for the three month period highlights the contrasting
supply and market conditions that prevail between our US and
European operations. The US continues to be supported by favourable
feedstock prices, in particular ethane, while our European
operations, most notably the surfactants and alkylate value chains,
are experiencing pressure on earnings and margins due to softer
demand and difficulties in securing feedstock at favourable prices.
Overall production and sales volumes, in the three months to
30 September 2012, decreased by 11%
and 6%, respectively, when compared to the prior year comparable
period. Our focus remains on improving margins through product
portfolio optimisation and strict cost management. The ethylene
tetramerisation unit, currently being constructed for Sasol
Solvents at our Lake Charles,
Louisiana site in the US, remains on schedule and is
expected to start-up during the third quarter of the 2013 calendar
year.
Arya Sasol Polymer Company (ASPC) continues to perform
well. Production volumes were 41% up compared to the prior year
comparable period. Sasol's 50% share of the year-to-date total
production output from the plants was 114 kt, achieving an average
utilisation rate for the three month period of approximately 96,9%
of design capacity. However, due to market challenges, specifically
in the Far East, sales volumes were negatively impacted. Further
challenges emerged during the period as a result of the devaluation
of the average Iranian rial exchange rate against the US dollar by
more than 100% over the last six months of the 2012 calendar year.
We previously announced our intention to divest of our investment
in ASPC. The divestiture process is continuing. The investment in
ASPC is being considered for classification as an asset
held-for-sale. However, significant uncertainty remains regarding
the fair value of the asset. Accordingly, it is possible that the
carrying value of the investment may be impaired at 31 December 2012.
Figure 1: Global chemical prices for 2013 (US$/metric
ton)
(Photo:
http://photos.prnewswire.com/prnh/20121203/NY22408-INFO)
Prices reflect international prices and are not necessarily
Sasol specific.
Sources: ICIS-LOR, Platts
Our South African-based polymers business continues to
experience margin pressure in line with the global polymers
industry, incurring an operating loss of R682 million for the three
months ended 30 September 2012
(operating losses amounted to R912 million for the period to
31 October 2012). While sales prices
are increasing in rand terms on the back of a weaker rand/US dollar
exchange rates and lower US dollar-based prices, higher feedstock
costs are eroding these benefits. Sales volumes were 5% higher than
the prior year comparable period on the back of the slow recovery
in the polymers market, however, this was partially offset by the
recent road freight industrial action. This performance was
underpinned by an 8% increase in saleable production, despite a
number of prolonged scheduled maintenance outages at a number of
the polymer plants. Cash fixed costs in this business continue to
remain under pressure and during the period, in addition to normal
inflation increases, additional maintenance outage costs were
incurred compared to the prior year comparable period due to the
phasing of scheduled maintenance outages. Our projects identified
to improve production performance are making significant progress.
The Ethylene Purification Unit (EPU5) project, which will increase
ethylene available for our polyethylene plants, is expected to be
operational in the second half of the 2013 calendar year, while the
C3 stabilisation project will achieve beneficial operation during
the middle of the 2014 calendar year.
Sasol Solvents' business performance for the three months
to 30 September 2012 remains under
pressure. While production volumes were 10% below those of the
prior year comparable period due mainly to planned maintenance
outages both in South Africa and
Germany, as well as reduced
production in Germany following a
demand slowdown, sales volumes were 10% above those of the prior
year comparable period resulting from customers restocking. The
economic crisis in Europe and
slowdown in the Chinese economy adversely impacted our solvents
business, resulting in our co-monomers products and our German
operations incurring losses in the first quarter. The reduction in
selling prices experienced across the solvents product portfolio,
coupled with increasing feedstock prices, resulted in severe margin
pressure. The weaker rand did, however, provide some relief but not
to the same extent as in the prior year comparable period. Given
the current weak market conditions, we continue to focus on our
business improvement and optimisation initiatives to improve the
performance of our plants and marketing activities.
In our other chemical businesses, the ongoing difficult
economic conditions in Europe and
the US have negatively impacted the global demand for paraffin
waxes. Despite these challenges, total wax production volumes have
increased marginally for the three months to 30 September 2012 compared to the prior year
comparable period. In Hamburg,
Germany, the installation of an electricity co-generation
plant is progressing well. It is expected that this plant, which
will start-up early in the 2013 calendar year, will yield an energy
cost saving of around 16%. In Sasolburg, the installation of an
electricity generator from blow-off nitric acid plant surplus steam
was successfully commissioned, achieving an energy cost saving of
10% in the production of explosives. Our fertiliser and explosives
businesses have experienced challenging market conditions, mainly
related to ongoing industrial action in the mining sector and
delays in the summer rainfall planting season.
Sasol Petroleum International (SPI) is currently in the process
of appraising the Inhassoro field in Mozambique to determine its commercial
viability. We are encouraged by the extended well test results and
expect to make a decision for development in the first half of the
2013 calendar year. Unfortunately, the wildcat exploration well,
Mupeji-1, which was drilled in the offshore M-10 concession did not
encounter hydrocarbons and was subsequently plugged and abandoned
as a dry well. Sasol's share of the estimated costs is US$53 million and will be expensed. We completed
the acquisition of 1 836 square kilometres (km2) of 3D
seismic in the offshore Sofala block and are acquiring a 2 000 km
2D seismic survey in the onshore Area A block. We continue to
investigate prospects and consider development plans in the area to
support current production.
In Gabon, where we hold
a 27,75% working interest, oil production remained on track. For
the quarter to 30 September 2012, we
produced a total of 439 000 barrels of oil, compared to 487 000
barrels in the prior year comparable period. No lifting took place
during September 2012 due to the
suspension of two wells, however, the impact thereof was negated by
positive stock movements. We will continue to develop this area
over the next four years.
Our Canadian shale gas assets (Farrell Creek and Cypress
A) continue to remain under pressure resulting from the slow
recovery of gas prices and the related slow down in development
activities, coupled with higher depreciation. We anticipate a
continuation of the current loss position for the 2013 financial
year. At 30 September 2012, our share
of the capital expenditure on the Canadian shale gas assets
amounted to CAD93 million for the
period. At that date, there were a total of 90 wells on stream,
with 19 wells which have been drilled but not yet completed. The
gas production rate for the quarter to the end of September
averaged 127 million standard cubic feet per day (mmscf/d) (100%
gross). The cumulative year-to-date production for these assets to
30 September 2012 was 11,9 billion
standard cubic feet (bscf) (100% gross).
Aeromagnetic surveys of the coal bed methane licences in
Botswana have been
completed and the 9 core hole drilling programme commenced at the
end of November 2012.
3. Financial performance
Weaker rand increases inflationary cost pressures
A 14% weaker average rand/US dollar exchange rate (R8,36/US$ at
31 October 2012) negatively impacted
cash fixed costs for the four months ended 31 October 2012. Cash fixed costs, excluding
once-off, growth costs and the impact of exchange rates, reflect
inflationary pressure, resulting primarily from increased labour
and maintenance costs.
Increased free cash flow
Our cash flow generation from operations for the three months
ended 30 September 2012 was higher
than the prior year comparable period, mainly due to increased
production volumes and the positive impact of the weaker average
rand/US dollar exchange rate. We continue to maintain a strong cash
position, sustaining a strong balance sheet. This, in turn,
supports the funding of our capital investment programme, as well
as our progressive dividend policy, while providing a buffer
against volatility and retaining financial flexibility in uncertain
credit markets where the cost of corporate credit is above risk
free rates. We continue to focus on strengthening working capital
management and monitoring credit exposure and counterparty
risks.
4. Projects update
We are fortunate to have a healthy portfolio of attractive
capital investment opportunities for the next ten years. However,
to execute such a large portfolio of opportunities requires a
significant amount of financial and human resources. Therefore,
with the aim of achieving maximum benefit from our growth
portfolio, we have reviewed and prioritised the projects in our
project pipeline. In determining the prioritisation of our
projects, we have considered the financial and human resource
requirements as well as the strategic implications of each capital
investment opportunity. Taking into account the impact on our
consolidated growth portfolio, we have staggered our growth
opportunities accordingly, to sharpen our focus on successful
project execution and delivery.
US integrated GTL complex
Following the successful completion of the feasibility studies
to determine the technical and commercial viability of an
integrated, two phase 96 000bbl/d GTL and chemicals facility
in Louisiana in the United States, we have decided to proceed
with front-end engineering and design (FEED). Total current project
costs are estimated to be between US$11
billion and US$14 billion, which are higher than previous
estimates primarily due to 30% of the fuels being upgraded to high
value chemicals, as well as higher cost escalations due to the
phasing of the project after the ethane cracker. We expect
beneficial operation to be achieved during the 2018 and 2019
calendar years for the two phases, respectively.
US integrated ethane cracker complex
Following the successful completion of the feasibility studies
to determine the technical and commercial viability of a world
scale 1,5 million tons per annum ethane cracker and associated
derivatives facility in Louisiana
in the United States, we have
decided to proceed with FEED. Total current project costs are
estimated to be between US$5 billion and
US$7 billion, which are higher than previous estimates
primarily due to increased plant capacity, the inclusion of
additional downstream derivative units and undertaking the project
without a partner. We expect beneficial operation to be achieved
during the 2017 calendar year.
Canada GTL
The feasibility study to determine the technical and commercial
viability of a GTL facility in Western
Canada was successfully completed. In accordance with the
need to prioritise our growth portfolio, a decision was made to
phase this investment opportunity after the integrated US GTL and
ethane cracker complex. A FEED decision will, therefore, be
considered at a later stage.
Uzbekistan GTL
Our Uzbekistan GTL FEED activities are progressing well and are
expected to be completed during the second half of the 2013
calendar year. An investment decision for this project is, amongst
others, dependent on appropriate project financing.
Good progress made with our mining replacement
projects
The newly inaugurated R3,5 billion Thubelisha Shaft at the
Twistdraai Colliery in Mpumalanga, South
Africa, has largely been completed. We anticipate that all
work, including gaining access to areas around the burnt coal
section, will be finalised in the third quarter of the 2013
calendar year. Progress on the Impumelelo and Shondoni Collieries,
which are part of Sasol Mining's R14 billion mine replacement
programme, is progressing. Despite shaft sinking challenges due to
productivity at the Impumelelo Colliery, it is anticipated that the
project will be completed within budget during the fourth quarter
of the 2014 calendar year. Construction of the Shondoni Colliery is
progressing and we expect that the first development section will
start opening up the underground area during the first quarter of
the 2014 calendar year. Beneficial operation in respect of this
colliery is anticipated for the 2015 calendar year.
Acquisition of coal reserves at Lake DeSmet
We purchased a property at Lake DeSmet, Wyoming, in the
United States for an amount of US$31
million. The property's coal reserve will form part of our
overall strategic resource portfolio. However, there are no plans
to develop the resource at this time.
FT wax expansion project
Construction on the FT wax expansion project facility in
Sasolburg, South Africa, continues
to progress. As reported previously, the commissioning of the new
Slurry Bed Reactor, which is key equipment for the capacity
expansion, has been delayed until the end of the 2013 calendar
year. While this will not jeopardise the completion date of 2015
for the full project, it will delay the first ramp up stage versus
the original schedule. The cost implications associated with the
delay will be communicated during our interim results announcement
once these costs have been finalised.
Progressing our sustainability initiatives
The construction of the R1,9 billion Sasolburg project to
produce 140 megawatts (MW) of power using natural gas is
largely completed. Commissioning activities have started and the
project should be completed ahead of schedule and below budget. We
expect that the facility will be on line and reach full capacity
before the end of December 2012, in
support of Sasol's ambition to generate up to 60% of our South
African electricity requirements.
During the period, through Sasol New Energy (SNE), we advanced
the development of our US$246 million
additional gas-fired electricity generation in Mozambique, in partnership with the country's
state-owned power utility Electricidade de Mozambique at Ressano Garcia. Negotiations of
the commercial contracts have been finalised and we are in the
process of finalising the definitive agreements with our partner
and obtaining concession rights. A final funding and investment
decision has been made by our board, subject to certain suspensive
conditions.
We acquired a 30,8% share in the UK-based OXIS Energy for
GBP15 million during the period. This
strategic investment will allow us to apply our extensive
experience of commercialising and scaling up chemical processes to
assist OXIS in realising the potential associated with their
development of next generation battery technology.
Clean Fuels 2 update
The high level Clean Fuels 2 (CF2) specifications were gazetted
on 1 June 2012, and are in line with
expectations. Our latest estimates on the capital expenditure
needed to comply with the core specifications is between R10
billion and R11 billion, attributable to both our share in the
Natref joint venture and Sasol Synfuels. These estimates are
subject to change, based on the finalisation of feasibility studies
being carried out in this regard by Natref. Additional projects,
that may be required to further mitigate the volume and octane
impact of CF2 and to restore capacity to pre-CF2 levels, are
currently being investigated in respect of Sasol Synfuels. Based on
the finalisation of the feasibility studies and the additional
projects, we estimate additional capital expenditure to range
between R2 billion and R3 billion.
We continue to engage with the South African government
(National Treasury and the Department of Energy) on cost-recovery
mechanisms and specifications to be prepared and published by the
South African Bureau of Standards.
5. Update on strategic issues
Credit rating
Our foreign currency credit rating according to Standard &
Poor's (S&P) is BBB/Negative/A-2 and the local currency rating
is A-/Negative/A-2. The latest S&P corporate rating on Sasol
was published on 16 October 2012.
Sasol was downgraded in line with the downgrade of South Africa from BBB+ to BBB. The
downgrade of South Africa resulted
primarily from the perceived deterioration of the country's
socioeconomic environment. Our foreign currency credit rating
according to Moody's is Baa1/stable/P-2/stable and our national
scale issuer rating is Aa3.za/P-1.za. The Moody's latest credit
opinion on the group was published on 30
March 2012. Their rating was reaffirmed on 1 October 2012.
The credit ratings reflect our diversified and highly profitable
domestic activities along the energy value chain, as well as our
current strong financial risk profile and prudent financial
policies.
US dollar bond offering
On 7 November 2012, we were very
pleased to announce our US$1 billion
bond issuance. The bond, with a tenure of 10 years and a fixed
coupon rate of 4,5%, was oversubscribed by 3,47 times. This coupon
is the lowest US dollar fixed coupon rate achieved by a South
African domiciled corporate (non-state owned enterprise) with this
term. The proceeds from this offering will be used for general
corporate purposes, including the funding of our capital
investments.
What to expect from COP18
The outcomes of COP17, held in
Durban in December 2011, comprised a set of work programmes
to allow parties to reach agreement over a longer period of time on
issues relating to adaptation and mitigation targets, and
measurement, reporting and verification processes. With the
COP18 meeting entering its second
week in Qatar, we do not
anticipate that significant decisions will be taken as the work
programmes provide for ongoing work between now and COP21, to be convened during the 2015 calendar
year.
Polymers competition enquiry
As reported previously, the South African Competition Commission
(the Commission) alleges that Sasol Chemical Industries Limited
charged excessive prices for propylene and polypropylene in the
South African market from 2004 to 2007. We continue to dispute the
Commission's allegations. In 2010, the matter was referred by the
Commission to the Competition Tribunal. The trial was originally
set down to be heard before the Competition Tribunal from
16 July 2012 to 10 August 2012. However, as a result of an
application brought by the Commission to postpone the hearing, the
trial is now set down for 13 May to 7 June
2013.
Liquid fuels competition enquiry
The South African Competition Commission (the Commission),
referred its diesel fuel market investigation to the South African
Competition Tribunal at the end of October
2012. We began engaging with the Commission in 2008 as part
of our group-wide competition law compliance review, which preceded
the Commission's investigation into the liquid fuels sector. At the
time, we found no evidence to support the Commission's concerns of
possible anti-competitive conduct in the diesel market. Our view
was informed by a rigorous internal review process, as well as
external legal opinion and expert economic analysis.
We have reviewed the referral and do not agree with the
Commission's allegations. We are, accordingly, defending the
matter.
Our activities in Iran
In November 2011, we announced
that we had entered into preliminary talks for a possible
divestiture of our share in Arya Sasol Polymer Company (ASPC). The
plant produces integrated ethylene and polyethylene products for
export. The products are not used in the development of petroleum
or natural gas resources or nuclear power in Iran. We continue to engage with a number of
interested parties who include business and government
stakeholders. Further announcements will be made once sufficient
progress has been made.
In October 2012, the Export-Import
Regulation Office of Iranian Trade Promotion Organization, issued
an order prohibiting the export of certain products. The list of 52
prohibited export products includes polymers. In terms of ASPC's
business licence, they are compelled to export its production and
may not trade in the local market. Sasol and ASPC engaged with the
Iranian government in order to obtain approval to continue
exporting polymer. On 6 November
2012, the Iranian government revised the export ban on the
52 products. Polyethylene is amongst those products on which the
restriction has been removed.
The Iranian environment, in which we operate, remains uncertain,
coupled with the devaluation of the Iranian currency. This will
potentially negatively impact our earnings.
6. Guidance for the full year
We expect the global environment and South African economy to
maintain a modest recovery into the financial year. However,
weakening demand in Europe and
lower growth in emerging markets and the US remain a concern. In
addition, the US faces additional pressure following the aftermath
of superstorm Sandy. In South
Africa, the outcome of the governing African National
Congress party's elective conference in Mangaung, South Africa, in December 2012 remains an area to be watched with
interest.
We expect an overall solid production performance for the 2013
financial year with our production guidance remaining
unchanged:
- Sasol Synfuels' volumes will be between 7,2 and 7,4 million
tons;
- The full year average utilisation rate at ORYX GTL in
Qatar is expected to be between
80% and 90% of nameplate capacity; and
- Full year production at ASPC in Iran will be approximately 90% of nameplate
capacity.
- Our shale gas venture in Canada will continue to show flat volumes in
line with the prior year;
As costs are incurred to improve plant stability and the weaker
rand continues to exert pressure on our South African businesses,
we expect that our normalised fixed costs will increase above the
South African producers price index (PPI) inflation. Cost control
is a specific target within our short-term incentive scheme and,
accordingly, management continues to focus on controllable cost
elements. Oil prices are expected to remain volatile over the near
term, due to weakening demand for oil in Europe, softer growth in emerging markets and
the US, as well as stronger-than-expected increases in supply.
Expected currency and commodity price volatility will impact the
valuation of closing balances at year end.
An update on earnings guidance will be provided once we have a
reasonable degree of certainty on the interim results for the 2013
financial year, taking into account any adjustments arising from
our half-year reporting closure process, as well as remeasurement
effects, including the potential impact resulting from the ASPC
impairment. This potential impairment will not have an impact on
headline earnings per share. The increased uncertainty within the
Iranian environment and the devaluation of the Iranian currency,
may further negatively impact our earnings.
The forecast financial information appearing in this update has
not been reviewed or reported on by Sasol's external auditors. We
will release Sasol's half-year results on Monday, 11 March 2013.
7. Other events 2013
11 March
|
Half-year
2013 financial results release
|
11 March
|
Dividend
declaration
|
10 June
|
CFO
letter
|
9 September
|
Full-year
2013 financial results release
|
9 September
|
Dividend
declaration
|
22 November
|
Sasol
Limited Annual General Meeting
|
25 November
|
CFO
letter
|
8. Investor Relations contacts
Please feel free to contact us as follows:
investor.relations@sasol.com
+27 11 441 3113
The Investor Relations team:
- Raj Naidu (Analyst Contact) Executive: Investor Relations
and Shareholder Value Management
- Sam Barnfather (Financial
Contact)
- Zanele Salman (Technical
Contact)
Sponsor: Deutsche Securities (SA) (Pty) Ltd.
Forward-looking statements:
Sasol may, in this document, 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 12 October 2012
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.
SOURCE Sasol Limited