2. The Ammonia CGU in the Southern African value chain was impaired by
R3,3 billion mainly as a result of much softer forecasted international
ammonia sales prices.
3. The Canadian shale gas business was further impaired by R1,9 billion
(CAD181 million) during the financial year.
Given the above financial performance, our gearing is expected to increase above our
previous market guidance of 49%, however we expect the net debt to EBITDA to
remain well below our debt covenant level of 3,0 times. We continue to progress our
asset portfolio optimisation strategy, with further details to be provided during the
results announcement.
A detailed production summary and key business performance metrics for the financial
year for all of our businesses, including our hedging activities, is available on our
website, www.sasol.com. The salient features are:
· Mining productivity improved by 5%, with a 22% decrease in external
purchases.
· Secunda Synfuels Operations (SSO) achieved an excellent performance
post the total West factory shutdown, enabling full year production levels in
line with our prior year.
· Liquid fuels sales volumes increased by 2% to 60 million barrels, exceeding
previous market guidance.
· Base Chemicals sales volumes (excluding Polymers US products) showed a
strong recovery during the second half of the financial year, exceeding our
previous market guidance.
· High Density Polyethylene (HDPE) production volume in the US was 218kt.
The Linear Low Density Polyethylene (LLDPE) and EO/EG plants are
ramping up, and achieved saleable production of 103kt and 41kt,
respectively.
· Performance Chemicals sales volumes declined by 3% due to external
supply constraints and a softer macro-environment. The Speciality Chemical
portfolio remains resilient.
We are also pleased to report that agreement has been reached with the South
African Revenue Services to withdraw all the issued and pending assessments for
the crude oil procurement matter relating to Sasol Oil for financial years 1999 to
2016.
Lake Charles Chemicals Project (LCCP) update
The LCCP remains in line with the revised cost estimate provided in May 2019 and
is mostly tracking schedule. As at the end of June 2019, overall project completion
is at 98%. Engineering and procurement activities are substantially complete and
construction progress is at 94%. The Ethane Cracker start-up sequence has
commenced and we expect beneficial operation (BO) by the end of July or shortly
thereafter.