JOHANNESBURG, Jan. 31, 2020 /PRNewswire/ -- Sasol is expected
to deliver a satisfactory set of operational results for the six
months ended 31 December 2019, with a good volume, cost and
working capital performance. The financial results were however
impacted by a weak macroeconomic environment. This resulted in
lower margins and operating profit.
Adjusted earnings before interest, tax, depreciation and
amortisation (Adjusted EBITDA*) are expected to decline by between
22% and 32% from R26,8 billion in the prior half year. This results
from a 9% decrease in the rand per barrel price of Brent crude oil,
softer global chemical and refining margins and a negative EBITDA
contribution from the Lake Charles Chemicals Project (LCCP). As the
LCCP units progress through the sequential beneficial operation
schedule, the costs associated with the relevant units are expensed
while the gross margin contribution follows the planned volume
ramp-up profile and inventory build. Earnings are further impacted
by approximately R1,7 billion in additional depreciation charges
and approximately R2 billion in finance charges for financial half
year 2020 as the LCCP units reach beneficial operation.
Shareholders are accordingly advised that:
- Earnings per share (EPS) for the financial half year are
expected to be between R5,37 and R7,76 per share. This is a
decrease of between 68% and 78% from the prior half year EPS of
R23,92;
- Headline earnings per share (HEPS) are expected to be between
R4,79 and R7,11 per share. This is a decrease of between 69% and
79% from the prior half year HEPS of R23,25. There were no
significant impairments recorded for the half year 2020;
- Core HEPS (CHEPS**) are expected to be between R7,90 and R10,04
per share. This is a decrease of between 53% and 63% from the prior
half year CHEPS of R21,45.
We expect net debt to EBITDA to remain below 3,0 times and
gearing to remain within the previous market guidance of 55% and
65% for financial half year 2020.
Lake Charles Chemicals Project update
Sasol provided an update on the impact of the explosion and fire
at the low-density polyethylene (LDPE) unit on 24 January 2020. Mainly as a result of the
aforementioned incident, Sasol has revised its guidance on the
EBITDA contribution from the LCCP for the financial year 2020 to
between US$50 million and US$100
million.
The financial information on which this trading statement is
based has not been reviewed and reported on by the Company's
external auditors. Sasol's financial results for the financial half
year ended 31 December 2019 will be
announced on Monday, 24 February
2020.
* Adjusted EBITDA are calculated by adjusting operating profit
for depreciation, amortisation, share-based payments, remeasurement
items, movement in rehabilitation provisions due to discount rate
changes, unrealised translation gains and losses, and unrealised
gains and losses on our hedging activities.
** Core HEPS are calculated by adjusting headline earnings with
once-off items, period close adjustments and depreciation and
amortisation of capital projects (exceeding R4 billion) which have
reached beneficial operation and are still ramping up, and
share-based payments on implementation of B-BBEE transactions.
Period close 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. However, this is not a
defined term under IFRS 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.
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, volume growth, increases in market share, total
shareholder return, executing our growth projects (including LCCP),
oil and gas reserves, cost reductions, our Continuous Improvement
(CI) initiative, our climate change strategy 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. 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