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Sasol Limited Group interim financial report

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Date: 
16 March 2006

and declaration of dividend number 53 for the six months ended 31 December 2005

  • significant earnings growth
  • higher international oil prices
  • major capital projects advanced - R6,1 bn
  • gearing reduces to 29%
  • interim dividend increased by 22%
 
a pleasing performance
 
Attributable earnings for the first half of the financial year 2006 (the 'interim period') increased by 86% from R3,9 billion to R7,3 billion. Headline earnings per share increased by 67% to R11,58. In US dollar terms, attributable earnings per share of US$1,81 represented a 76% increase. IFRS 2, which refers to share-based payments, applied from 1 July 2005 resulted in attributable earnings diluting by R84 million and headline earnings per share reducing by 14 cents during the interim period. Previous years' comparative information has been restated accordingly.
 
higher international oil prices
 
Operating profit increased by R4,6 billion (71%) to R11,1 billion. Higher average international oil prices (dated Brent US$59,21/b versus US$42,77/b) boosted operating profit by about R2,9 billion, taking into account the negative effect of the Sasol Synfuels oil production hedge incurred in the previous reporting period of R0,7 billion. This benefit was enhanced by the positive impact of the weaker rand (average rate R6,52: US$1,00 versus R6,21: US$1,00), which increased operating profit by approximately R0,6 billion.
 
The currency effects manifested themselves across all of Sasol's businesses. The benefit of higher international oil prices was, however, only realised in the energy and fuel-related businesses with adverse effects being experienced in the chemical businesses because of higher oil-derivative feedstock costs. Furthermore, margins were adversely affected in most of the chemical businesses by a reduction in international chemical commodity prices.
 
major capital projects advanced
 
Cash flow capital expenditure amounted to R6,1 billion. Major projects advanced included the fuel quality enhancement and polymer expansion project (Project Turbo) in South Africa, the Oryx gas to-liquids (GTL) venture in Qatar and the Arya Sasol polymers project in Iran.
 
gearing reduced
 
Gearing (net debt as a percentage of shareholders' equity) reduced from 42% at 31 December 2004 to 29%. Gearing is expected to return to within our targeted range of 30% to 50% by the end of the financial year 2006.
 
interim dividend increased
 
The interim dividend declared of R2,80 per share represents a 22% increase compared to the previous interim dividend declared.
 
 

New Balance

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, 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 and cost reductions. Words such as “believe”, “anticipate”, “expect”, “intend”, “seek”, “will”, “plan”, “could”, “may”, “endeavour” 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 are discussed more fully in our most recent annual report under the Securities Exchange Act of 1934 on Form 20-F filed on 9 October 2013 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.

JORDAN