JOHANNESBURG, Feb. 22, 2021 /CNW/ -- Sasol delivered a good set
of results for the six months ended 31
December 2020. Our earnings increased by more than 100% to
R15,3 billion from R4,5 billion in the prior period.
Despite a 23% decrease in the rand/barrel oil price, our
adjusted EBITDA decreased by only 6%. This achievement is as a
result of a strong cash cost, working capital and capital
expenditure performance in response to the challenging
environment.
Our earnings were positively impacted by the following non-cash
adjustments:
- Gains of R4,6 billion on the translation of monetary assets and
liabilities due to a 15% strengthening of the closing rand/US
dollar exchange rate compared to June
2020;
- Gains of R5,0 billion on the valuation of financial instruments
and derivative contracts; and
- R3,3 billion gain on the realisation of the foreign currency
translation reserve (FCTR), mainly on the divestment of 50%
interest in the US LCCP Base Chemicals business.
Key
metrics
|
Half year
31 Dec 2020
|
Half year
31 Dec 2019
|
Change %
|
EBIT (R
million)
|
21
650
|
9 853
|
>100
|
Adjusted
EBITDA1(R million)
|
18
608
|
19 839
|
(6)
|
Headline earnings (R
million)
|
11
858
|
3 670
|
>100
|
Basic earnings per
share (Rand)
|
23,41
|
6,56
|
>100
|
Headline earnings per
share (Rand)
|
19,16
|
5,94
|
>100
|
Core headline
earnings per share2(Rand)
|
7,86
|
9,25
|
(15)
|
Dividend per share
(Rand)
|
|
|
|
- Interim
(Rand)
|
-
|
-
|
-
|
- Final
(Rand)
|
-
|
-
|
-
|
|
|
|
|
1. Adjusted
EBITDA is calculated by adjusting EBIT for depreciation and
amortisation, share-based payments, remeasurement items, movement
in environmental provisions due to discount rate changes, all
unrealised translation gains and losses and all unrealised gains
and losses on our derivatives and hedging activities.
The comparative
periods have been restated to include all unrealised translation
gains and losses and all unrealised gains and losses on derivative
and hedging activities. We believe Adjusted EBITDA is a useful
measure of the Group's underlying cash flow performance. However,
this is not a defined term under IFRS and may not be comparable
with similarly titled measures reported by other companies.
(Adjusted EBITDA constitutes pro forma financial information in
terms of the JSE Limited Listings Requirements and should be read
in conjunction with the basis of preparation and pro forma
financial information as set out in the full set of reviewed
interim financial results).
2. Core headline
earnings per share (Core HEPS) is calculated by adjusting headline
earnings per share with once-off items such as the translation
impact of closing exchange rate, all realised and unrealised
derivatives and hedging gains/losses, the implementation of the
Khanyisa B-BBEE transaction and losses attributable to the LCCP
while still in ramp-up phase.
The comparative
period has been restated to include all unrealised translation
gains and losses and all realised and unrealised gains and losses
on derivative and hedging activities.
(Core HEPS
constitutes pro forma financial information in terms of the JSE
Limited Listings Requirements and should be read in conjunction
with the basis of preparation and pro forma financial information
as set out in the full set of reviewed interim financial
results.)
|
Our key metrics were as follows:
- Working capital ratio of 14,9% compared to 14,6% for the prior
period. Investment in working capital was R27,3 billion;
- Capital expenditure of R7,5 billion;
- Normalised cash fixed reduced by 10% (R3,2 billion) compared to
the prior period;
- Profit before interest and tax (EBIT) of R21,7 billion compared
to R9,9 billion in the prior period;
- Adjusted EBITDA declined by 6% from R19,8 billion in the prior
period to R18,6 billion;
- Basic earnings per share (EPS) increased to R23,41 per share
compared to R6,56 in prior period; and
- Headline earnings per share (HEPS) increased by more than 100%
to R19,16 per share compared to the prior period.
Turnover (R
million)
|
|
EBIT (R
million)
|
Half
year 31 Dec
2019
|
Half
year 31 Dec
2020
|
|
Half
year 31 Dec
2020
|
Half
year 31 Dec
2019
|
10 348
|
10
807
|
Mining
|
1
732
|
1 374
|
2 635
|
1
988
|
Exploration and
Production International
|
897
|
1 023
|
41 206
|
30
178
|
Energy
|
5
098
|
6 743
|
24 642
|
27
409
|
Base
Chemicals
|
3
624
|
(1 488)
|
32 933
|
33
750
|
Performance
Chemicals
|
1
754
|
1 294
|
–
|
6
|
Group
Functions
|
8
545
|
907
|
111 764
|
104
138
|
Group
performance
|
21
650
|
9 853
|
(12 594)
|
(12
170)
|
Intersegmental
turnover
|
|
99 170
|
91
968
|
External
turnover
|
Net asset
value
|
Half
year 31 Dec
2020
|
Full
year 30 Jun
2020
|
Change
%
|
Total assets (R
million)
|
397 516
|
479 162
|
(17)
|
Total liabilities (R
million)
|
236 473
|
319 914
|
26
|
Total equity (R
million)
|
161
043
|
159
248
|
1
|
Rights issue
A decision was made not to pursue a rights issue given the
current macroeconomic outlook, and the significant progress made on
our response plan initiatives.
The balance sheet deleveraging pathway will continue to be
prioritised to ensure that we operate within our financial
covenants and maintain adequate liquidity headroom, whilst
delivering the Sasol 2.0 transformation programme.
Balance sheet management
Cash generated by operating activities decreased by 40% to
R11,7 billion compared to the prior period and our net cash on
hand decreased from R34,1 billion as at 30
June 2020 to R27,6 billion.
Although our cash flows were impacted by low crude oil prices,
softer chemical prices, plant downtime and the impact of COVID-19,
our cash conservation initiative and asset divestment programme
enabled us to repay approximately R28 billion (US$2 billion) of debt. In addition, we
repaid ZAR banking facilities of approximately R4 billion.
Actual capital expenditure amounted to R7,5 billion compared to
R21,4 billion during the first six months of 2020. The free
cash flow for the period was R0,4 billion in a low US$43,62/barrel average oil price
environment.
To create flexibility in Sasol's balance sheet during this peak
gearing period, our lenders agreed to lift our covenant from 3,0
times to 4,0 times of Net debt: EBITDA (bank definition) when
measured at 31 December 2020. This
provided additional flexibility, subject to conditions, which were
consistent with our capital allocation framework (i.e. prioritising
debt reduction through commitments to suspend dividend payments and
acquisitions while our leverage is above 3,0 times Net debt:
EBITDA). We are appreciative of the continued support from our
lenders during this challenging period.
Our Net debt: EBITDA ratio at 31 December 2020 was 2,6
times (bank definition), significantly below the threshold
level.
At 31 December 2020, our total debt was R126,3 billion
compared to R189,7 billion as at 30 June 2020.
During the period, we utilised proceeds from our asset divestments
to repay the US Dollar syndicated loan, as well as a portion of our
revolving credit facility, reducing our US dollar denominated debt
by almost R28 billion (US$2
billion) to R121 billion (US$8,2
billion).
Through our comprehensive response plan and planned asset
divestments, we intend to further reduce our net debt to achieve a
Net debt: EBITDA ratio of less than 2,0 times and gearing of 30% by
2023.
Our gearing decreased from 114,5% at 30
June 2020 to 76% at 31 December
2020 mainly due to repayment of US dollar debt (20%) and a
stronger closing Rand/US dollar exchange rate (7%).
As at 31 December 2020, our liquidity headroom was in
excess of R53 billion (US$3,6
billion) well above our targeted liquidity of at least
US$1 billion, with available rand and
US dollar-based funds improving as we advance our focused
management actions. We continue to assess our mix of funding
instruments to ensure that we have funding from a range of sources
and a balanced debt maturity profile.
We have no significant debt maturities before November 2021
when the R2,2 billion (US$150 million) term loan becomes
due. In terms of the covenant waivers with the lenders that existed
at 30 June 2020, we remain obliged to
use certain planned disposal proceeds to settle debt. As a result,
R14,3 billion (US$975 million) has
being classified as short-term debt.
We continue to actively manage the balance sheet with the
objective of maintaining a healthy liquidity position and a
balanced debt maturity profile.
Dividend
Given our current financial leverage and the risk of a prolonged
period of economic uncertainty, the Board believes that it would be
prudent to continue with the suspension of dividends. We expect the
balance sheet to regain flexibility following the implementation of
our comprehensive response plan strategy.
Mozambique Production Sharing Agreement (PSA)
progresses
On 19 February 2021 the Board
approved the final investment decision (FID) on the Mozambique PSA
license area. The total estimated project cost is US$760 million.
Importantly, this project will entail Mozambique in-country monetisation of gas
through a 450 megawatt gas-fired power plant and a liquefied
petroleum gas (LPG) facility in the same time frame. The balance of
the gas produced will be exported to South Africa to sustain our operations.
The PSA development underpins Sasol's gas transformation
strategy by securing additional gas supply from southern
Mozambique into Sasol's gas value
chain starting 2024 and serves as a cornerstone in addressing
Sasol's sustainability agenda.
Note to Editors:
The full announcement and the reviewed interim financial results
will be available on the Company's website at
https://www.sasol.com/investor-centre/financial-reporting/annual-integrated-reporting-set.
The pre-recorded presentation will be available on the
following link:
https://www.corpcam.com/Sasol22022021
The President and Chief Executive Officer and Chief Financial
Officer will host a conference call via webcast at 15h00 (SA time)
to discuss the results and give an update of the business.
Conference call
details:
|
|
|
|
Monday, 22 February
2021
|
Time
|
|
|
South
Africa
|
15:00
|
|
|
United
Kingdom
|
13:00
|
|
|
United States
(ET)
|
08:00
|
|
|
Live conference call
link:
https://www.corpcam.com/Sasol22022021Questions
|
Issued by:
Matebello Motloung, Manager: Group Media Relations
Direct telephone: +27 (0) 10 344 9256; Mobile: +27 (0)
82 773 9457
matebello.motloung@sasol.com
Alex Anderson, Senior Manager:
Group External Communication
Direct telephone: +27 (0) 10 344 6509; Mobile: +27 (0) 71 600
9605
alex.anderson@sasol.com
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SOURCE Sasol Limited