Sasol's financial results for the six months ended 31 December 2023 were negatively impacted by the continued volatile macro-economic environment, with weaker oil and petrochemical prices, unstable product demand and ongoing inflationary cost pressure. Despite some operational improvements in South Africa, persistent underperformance of the state-owned enterprises involved in Sasol's value chain and the weaker global growth outlook continue to impact Sasol's business performance.
Sasol's adjusted earnings before interest, tax, depreciation and amortisation (adjusted EBITDA*) for the six months ended 31 December 2023 are expected to be between R26,2 billion and R29,4 billion compared to the prior half year adjusted EBITDA of R32,0 billion (representing a decrease of between 8% and 18%).
Shareholders are advised that, for the 2024 financial half year:
Earnings per share (EPS) are expected to be between R13,33 and R16,58 compared to the prior half year EPS of R23,23 (representing a decrease of between 29% and 43%);
Headline earnings per share (HEPS) are expected to be between R17,90 and R22,22 compared to the prior half year HEPS of R30,90 (representing a decrease of between 28% and 42%); and
Core HEPS (CHEPS**) are expected to be between R16,43 and R19,86 compared to the prior half year CHEPS of R24,55 (representing a decrease of between 19% and 33%).
Notable non-cash adjustments (before taxation) for the six months ended 31, 2023 include:
Unrealised gains of R2,7 billion on the translation of monetary assets and liabilities, and valuation of financial instruments and derivative contracts; and
Remeasurement items net loss of R5,8 billion, mainly due to
R3,9 billion relating to the Secunda liquid fuels refinery cash generating unit (CGU). The liquid fuels component of the Secunda refinery was fully impaired at 30 June 2023. The value-in-use was further negatively impacted by an increase in forecast Eskom electricity tariffs and lower short-term Brent crude oil prices, resulting in the full amount of costs capitalised during the period being impaired.
R0,6 billion relating to the full impairment of Chemicals Africa's Chlor Alkali and Polyvinyl Chloride (PVC) CGU, and R0,5 billion partial impairment of the Polyethylene CGU mainly as a result of lower selling prices associated with reduced market demand.
The financial information underpinning this trading statement has not been reviewed and reported on by the Company's external auditors.
Sasol will release its 2024 interim financial results on Monday, 26 February 2024. Sasol's President and Chief Executive Officer, Fleetwood Grobler, and Chief Financial Officer, Hanré Rossouw, will present the results at 09h00 (SA time) on 26 February 2024, followed by a market call to address questions.
Please connect to the call via the webcast link: https://www.corpcam.com/Sasol26022024 or via teleconference call link: https://services.choruscall.za.com/DiamondPassRegistration/register?confirmationNumber=9724124&linkSecurityString=1c4fef5a7c
* Adjusted EBITDA is calculated by adjusting operating profit for depreciation, amortisation, share-based payments, remeasurement items, change in discount rates of our rehabilitation provisions, all unrealised translation gains and losses, and all unrealised gains and losses on our derivatives and hedging activities.
** Core HEPS is calculated by adjusting headline earnings with non-recurring items, earnings losses of significant capital projects (exceeding R4 billion) which have reached beneficial operation and are still ramping up, all translation gains and losses (realised and unrealised), all gains and losses on our derivatives and hedging activities (realised and unrealised), and share-based payments on implementation of Broad-Based Black Economic Empowerment (BBBEE) transactions. Adjustments in relation to the valuation of our derivatives at period end are to remove volatility from earnings as these instruments are valued using forward curves and other market factors at the reporting date and could vary from period to period. We believe core headline earnings are a useful measure of the group´s sustainable operating performance.
Adjusted EBITDA and Core HEPS are not defined terms under International Financial Reporting Standards and may not be comparable with similarly titled measures reported by other companies. The aforementioned adjustments are the responsibility of the directors of Sasol. The adjustments have been prepared for illustrative purposes only and due to their nature, may not fairly present Sasol´s financial position, changes in equity, results of operations or cash flows.
