JOHANNESBURG, April 8, 2020 /PRNewswire/ -- Shareholders are
referred to Sasol's SENS announcement issued on 31 March 2020. In that announcement, Sasol stated
it would continue to run its operations, in line with regulatory
requirements applicable in the jurisdictions we operate in, to
ensure uninterrupted supply of essential products such as fuels and
chemicals in these jurisdictions. We reiterate that the COVID-19
pandemic is highly dynamic, and we will continue to update the
market of any further impact on Sasol's business.
A small number of Sasol employees have tested positive for
COVID-19 and are receiving our full support. These were isolated
cases and have not negatively impacted operations.
Sasol communicated a comprehensive response strategy on
17 March 2020 and substantial
progress has been made with regards to its US$2 billion cash conservation programme. While
the Company has made substantial progress, it will also implement
additional self-help management actions to mitigate further
negative impacts of COVID-19 across its portfolio.
UPDATE ON OPERATIONS
In South Africa, the national
COVID-19 lockdown has resulted in an unprecedented decline in fuel
demand since coming into effect on Friday, 27 March 2020. Sasol and its partner in Natref,
Total South Africa, decided to suspend the production at Natref
with effect from Thursday, 9 April
2020 until further notice.
Given the steep decline in fuels demand, a decision was also
made by Sasol to reduce daily production rates at our Secunda
Synfuels Operations (SSO) by approximately 25% to meet the current
market demand, while maintaining optimal inventory levels. We will
maintain these production rates until further notice, while
carefully monitoring the supply and demand balance. A further
reduction in production rates may be required depending on further
developments in the fuels market. All Sasol's mines are continuing
to operate notwithstanding the lower internal demand, resulting in
the external coal purchases being significantly minimised, compared
to what was previously planned for the remainder of this financial
year.
Chemicals production will continue to be prioritised within the
revised SSO operating parameters including this cutback scenario.
Despite the suspension of production at the Natref refinery and
lower production rates at SSO, the country's current demand for
fuels and chemicals, including sanitisers, will be met. The Company
will continue to monitor the chemicals demand as well as supply
chain risks and will keep the market updated on developments.
Given these developments and the decline in demand, liquid fuels
sales volumes are expected to be approximately 50 – 51 million
barrels against the previously guided 57 – 58 million barrels for
financial year 2020. Accordingly, Synfuels production volumes will
be approximately 7,3 – 7,4 million tons against the previously
guided range of 7,7 – 7,8 million tons. At this stage a similar
reduction in Synfuels chemicals demand is not being experienced,
and Sasol is prioritising supply of chemicals within South Africa as well as strong export
demand.
More detail on production volumes and updated guidance will be
provided in the Company's Q3 FY20 Business Performance Metrics
report, to be released in April
2020.
RESPONSE STRATEGY PROGRESS
As referenced earlier, the Company has made significant progress
on the US$2 billion business
self-help measures for financial years 2020 and 2021, which form
the basis of the response strategy to the COVID-19 pandemic and oil
price volatility.
Given the continued negative impact of COVID-19 on market demand
and global macro-economic indicators, Sasol's management team is in
the process of proactively identifying further measures to provide
an additional buffer against short term volatility.
Sasol has put in place governance structures to manage the
situation appropriately and will take decisive action where
necessary to respond to any further changes in markets. These
additional measures will be communicated to the market once agreed
with the various stakeholders.
Safeguarding the health and well-being of employees and
providing essential products to customers and stakeholders remains
the Company's priority.
Disclaimer - 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, expectations, developments and business
strategies. Examples of such forward-looking statements include,
but are not limited to, statements regarding exchange rate
fluctuations, expectations regarding future cash flow, Sasol's
ability to meet its debt covenants, Sasol's ability to achieve the
cost savings or complete its asset disposal programme, the actions
referred to herein intended to strengthen Sasol's balance sheet and
to maintain profitability at lower oil prices and business
performance outlook. Words such as "believe", "anticipate",
"expect", "intend", "seek", "will", "plan", "could", "may",
"endeavour", "target", "forecast" 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. You are accordingly advised to exercise caution when
trading in the Company's securities until such time the full
details of the disposal and the rights offer are published. These
factors and others are discussed more fully in our most recent
annual report on Form 20-F filed on 28
October 2019 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.
For further information, please contact:
Sasol Investor Relations, please contact:
Feroza Syed, Chief Investor
Relations Officer
Direct telephone: +27-(0)-10-344-7778
investor.relations@sasol.com
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SOURCE Sasol Limited