JOHANNESBURG, April 11, 2017 /PRNewswire/ --
In December 2016, Sasol announced
that it entered into crude oil put options, in terms of the
Company's financial market risk policy, to mitigate specific risks
and to provide protection against adverse movements in commodity
and final product prices.
The Company also stated that as part of its financial risk
mitigation strategy it was reviewing other commodity and currency
hedges to protect and strengthen the Company's balance sheet as
measured in terms of its gearing and net debt to earnings before
interest, tax, depreciation and amortisation ("EBITDA") targeted
levels. In its half-year to 31 December results published on
27 February 2017, Sasol announced
that it had hedged approximately 12% of its Rand/US dollar exposure
for specific periods in its 2018 financial year.
Sasol has completed the majority of its Rand/US dollar hedging
programme for the 2018 financial year ending on 30 June 2018 using zero-cost collar instruments.
Hedges with a total notional amount of US$4
billion (averaging US$1
billion per quarter) have been put into place, with an
annual average floor of R13,46/US$, and an annual average cap of
R15,51/US$. These levels approximate the quarterly averages.
These hedges approximate 70% of the Company's expected net
Rand/US dollar exposure in the 2018 financial year. These hedges
will provide Sasol with some cash flow and balance sheet
protection, as gearing and net debt to EBITDA levels are expected
to peak during the 2018 financial year. In addition, the financial
risk mitigation strategy with reference to currency hedges is
expected to partially mitigate the negative translation impact of
valuing the balance sheet at each reporting date. The Company
continues to review financial market risks, and should additional
material hedges be put into place, appropriate announcements will
be made.
Sponsor: Deutsche Securities (SA) Proprietary Limited
Investor relations:
Cavan Hill, Senior Vice President:
Investor Relations
Telephone: +27(0)10-344-9280
SOURCE Sasol Limited