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Sasol's headline earnings per share (HEPS) for the six months ended 31 December 2014 is expected to increase by between 3% and 9% (approximating R0,91 to R2,72) and earnings per share (EPS) for the same period is expected to increase by between 51% and 57% (approximating R10,65 to R11,90), off a 2014 half year base of R30,19 and R20,88 respectively. Excluding the impact of notable once-off items, net impairments charges, stock movements and the share-based payment expense, EPS would have decreased by between 21% and 27%. Sasol's profitability for the first half of the 2015 financial year was positively impacted by the following factors: - A solid operational performance through increases in production and sales volumes across the majority of Sasol's integrated value chain;
- Normalised cash fixed costs continue to trend below inflation;
- 9% weaker average rand/US dollar exchange rate;
- Notable once-off charges prompted by volatile macro-economic factors, changes to the share price and decisive management actions:
- Reversal of share-based payment expense of R2,5 billion due to a 32% lower share price;
- Positive impact arising from the movement in unrealised profit in inventory of approximately R2,0 billion at period end;
- Net impairments of R0,2 billion for the six months under review compared to the comparable period of R6,0 billion, which included the R5,3 billion partial impairment of our Canadian shale gas assets; and
- Extension of the useful life of our Southern African operations amounting to R2,5 billion.
Conversely, Sasol's profitability was negatively impacted by 19% lower average Brent crude oil prices (average dated Brent was US$89/barrel for the six months ended 31 December 2014 compared to US$109,83 in the prior comparable period). We maintained a strong group-wide operational performance, with our Southern Africa Energy business increasing white and black product volumes by 3%. Our Base Chemicals and Performance Chemicals businesses increased their sales volumes by 1% and 7% respectively, on a comparable basis. In addition, our ORYX GTL facility sustained its solid performance, with an average utilisation rate of 91% for the period under review. A detailed production summary and key business performance metrics have been made available on our website, http://www.sasol.com. Our company-wide business performance enhancement programme is progressing well and we are set to deliver on our targets for the 2015 financial year in terms of both sustainable cost savings and implementation costs. On 1 July 2014, we operationalised our Project 2050 initiative to extend the lifespan of our South African operations to the middle of the century, further demonstrating our commitment to South Africa and the region. The Sasolburg and Natref operations are extended to 2034. This resulted in a decrease in depreciation of R0,7 billion and a decrease in environmental provisions of R1,8 billion for the six months ended 31 December 2014. The most significant remeasurement items for this period are the: - Reversal of the impairment of the FT Wax Expansion Project of R1,3 billion, which was mainly due to the extension of the useful life of the asset from 2029 to 2034 and a weaker rand/US dollar exchange rate; and
- Partial impairment of our Etame assets in Gabon of R1,3 billion, primarily as a result of the decrease in the oil price.
On 28 January 2015, Sasol announced that it is formulating a comprehensive plan to conserve cash, in response to the lower international oil prices. The response plan targets, related organisational structure refinements and key policy changes will be communicated at our results announcement on 9 March 2015. Our results for the first half of the 2015 year may be further affected by any adjustments resulting from our half-year end closure process. This may lead to a change in the estimated earnings noted above. This trading statement only deals with the comparison to the first half of the 2014 financial year. Guidance will be provided on the full 2015 financial year's results when there is a reasonable degree of certainty in this regard. We expect that there will be a further negative impact on our results for the remainder of the 2015 financial year due to lower oil prices. The financial information on which this trading statement is based has not been reviewed or reported on by the Company's external auditors. Sasol's financial results for the six months ended 31 December 2014 will be announced on Monday, 9 March 2015. 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 29 September 2014 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. About Sasol: Sasol is an international integrated energy and chemicals company that leverages the talent and expertise of our more than 33 000 people working in 37 countries. We develop and commercialise technologies, and build and operate world-scale facilities to produce a range of high-value product streams, including liquid fuels, chemicals and low-carbon electricity. Contact:
Sasol Investor Relations
Telephone +27-(11)-441-3113;
Investor.relations@sasol.com
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