Trading Statement for the financial half year ended 31 December 2019 and LCCP Update
Sasol Ordinary Share codes: JSE: SOL NYSE: SSL
Sasol Ordinary Share ISIN codes: ZAE000006896 US8038663006
Sasol BEE Ordinary Share code: JSE: SOLBE1
Sasol BEE Ordinary Share ISIN code: ZAE000151817
(“Sasol” or “the Company”)
TRADING STATEMENT FOR THE FINANCIAL HALF YEAR ENDED 31
DECEMBER 2019 AND LCCP UPDATE
Trading Statement for the financial half year ended 31 December 2019
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
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
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.
31 January 2020
Sponsor: Merrill Lynch South Africa Proprietary Limited
Date: 31-01-2020 07:05:00
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