Sasol Headline Earnings Per Share up by 14% to a Record R60,16

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Sep 08, 2014, 01:50 ET

JOHANNESBURG, September 8, 2014 /PRNewswire/ --

Highlights

Synfuels production volumes of 7,6 million tons - highest in a decade
ORYX GTL plant achieved an average utilisation rate of 97%
Normalised cash fixed costs - 1,8% below SA PPI
Headline earnings per share up by 14% to a record R60,16
Total dividend of R21,50 per share, up by 13%
Total skills development and socioeconomic spend of R1,4 billion
Business performance enhancement programme to deliver increased annual savings of at least R4 billion by 2016
Capital expenditure of R39,5 billion - 57% invested in South Africa

A new era for Sasol

President and Chief Executive Officer, David E. Constable says:

"Underpinned by a solid operational performance, ongoing business improvements, and strengthened stakeholder relations, Sasol has outperformed our previous best efforts.

The all-encompassing changes we have introduced in the last three years, have set the scene for us to deliver on our strategy as a more efficient, effective and competitive organisation. The benefits of the detailed work we have done to reposition, restructure and re-energise the company are already evident in our performance, and in the commitment of our people.

Over the last three years, the compounded annual growth rate of headline earnings per share increased by 21%, and dividends by 18%. This outstanding performance sets the platform for what is the beginning of a new era for the group.

In this new era, our focus will be on becoming a leading monetiser of natural resources, and a trusted partner to countries seeking to add value to their hydrocarbon reserves."

Acting Chief Financial Officer, Paul Victor says:

"These outstanding final results are due to an excellent underlying operational performance, coupled with a continued focus on cost control. Despite the impact of increased non-cash charges, we continue to deliver growth in earnings. Our cash flow generation remains robust, which together with our under-geared balance sheet, allows us to increase dividends in line with our progressive dividend policy. At the same time we are able to invest in new growth projects in Southern Africa and North America. As this new era for Sasol evolves, we are well placed to continue delivering value to our shareholders."

Financial results overview*

Earnings attributable to shareholders for the year ended 30 June 2014 increased by 13% to R29,6 billion. Headline earnings per share increased by 14% to R60,16 and earnings per share increased by 12% to R48,57, over the same period.

Sasol recorded an operating profit, after remeasurement items, of R41,7 billion for the year, up 7%, excluding our share of profits of equity accounted joint ventures and associates of R4,1 billion, which includes our ORYX GTL plant. This achievement was on the back of an overall improved operational performance. Operating profit was boosted by a 17% weaker average rand/US dollar exchange rate (R10,39/US$ at 30 June 2014 compared with R8,85/US$ at 30 June 2013), and a progressive improvement in chemical prices, while the average Brent crude oil price (average dated Brent was US$109,40/barrel at 30 June 2014 compared with US$108,66/barrel at 30 June 2013) remained flat. Our share price increased by 47% over the financial year closing at R632,36. This however resulted in a substantial year on year increase in the provision for long-term employee share based incentives of R3,6 billion.

Earnings attributable to shareholders in the current year were negatively impacted by remeasurement items** totalling R7,6 billion (30 June 2013 - R6,5 billion). These items relate primarily to the R5,3 billion (CAD540 million) impairment of our Canadian shale gas assets, and the R466 million (EUR32 million) partial impairment and final loss on disposal of R966 million (EUR67 million) of our Solvents Germany assets.

Sasol Synfuels delivered excellent production volumes of 7,6 million tons (mt) (30 June 2013 - 7,4 mt), an increase of 2% compared to the prior year. This performance, a record for the past decade, was achieved despite a planned total and phase shutdown of the east factory in September 2013. Normalised Synfuels production increased by 4% on a comparable basis.

Production performance at our ORYX gas-to-liquids (GTL) plant, which achieved an average utilisation rate of 97%, also exceeded plan.

In our European chemical businesses, we continued to optimise our production volumes and margins, in light of the slower than expected recovery of the European market. Our Sasol Olefins and Surfactants business delivered improved operating results and benefited from low feedstock prices in the US. Sasol Polymers is returning to profitability mainly as a result of the commissioning of our Ethylene Purification Unit 5 (EPU5) during the year, coupled with the effect of our business turnaround plan.

Normalised cash fixed costs increased by only 5,5%, 1,8% below the South African producers' price index (SA PPI) of 7,3% for the year. This was achieved despite a challenging South African cost environment in respect of labour, maintenance and electricity costs. A key area of management focus is our business performance enhancement programme, where we have made significant progress in reducing the cost base sustainably. The programme realised actual benefits of R469 million for the financial year, R700 million on an annualised basis.

The change in the effective tax rate from 31,7% to 32,6% resulted primarily from the impact of the Canada impairment, the reduction of the Wax fine imposed by the European Commission in -2009, as well as the Polymers fine incurred during the financial year.

Cash flow generated from operations increased by 26% to R65,5 billion compared with R51,9 billion in the prior year. This includes an increase in working capital of R2,1 billion, mainly as a result of price effects due to higher commodity prices and the weaker exchange rate. Capital spend for the year amounted to R39,5 billion.

Taking into account the ongoing strength of our financial position, current capital investment plans, as well as our progressive dividend policy, the Sasol board of directors has declared a record final dividend of R13,50 per share. This approach remains in line with our commitment to consistently return sustainable value to shareholders.

The final cash dividend is payable on the ordinary shares and the Sasol BEE ordinary shares. The dividend has been declared out of retained earnings (income reserves). The South African dividend withholding tax rate is 15% and no credits in terms of secondary tax on companies have been utilised. The net dividend amount payable to shareholders, who are not exempt from the dividend withholding tax, is R11,475 per share, while the dividend amount payable to shareholders who are exempt from dividend withholding tax is R13,50 per share.

The salient dates for holders of ordinary shares and BEE ordinary shares are:

    Declaration date                                              Monday, 8 September 2014
    Last day for trading to qualify for and participate
    in the final dividend (cum dividend)                            Friday, 3 October 2014
    Trading ex dividend commences                                   Monday, 6 October 2014
    Record date                                                    Friday, 10 October 2014
    Dividend payment date                                          Monday, 13 October 2014

The salient dates for holders of our American Depository Receipts are ^[¹^]:

    Ex dividend on New York Stock Exchange (NYSE)               Wednesday, 8 October 2014
    Record date                                                   Friday, 10 October 2014
    Approximate date of currency conversion                      Tuesday, 14 October 2014
    Approximate dividend payment date                             Friday, 24 October 2014

[1] All dates are approximate as the NYSE sets the record date after receipt of the dividend declaration.

On Monday, 13 October 2014, dividends due to certificated shareholders on the South African registry will either be electronically transferred to shareholders' bank accounts or, in the absence of suitable mandates, dividend cheques will be posted to such shareholders. Shareholders who hold dematerialised shares will have their accounts held by their CSDP or broker credited on Monday, 13 October 2014.

The full earnings release, as well as other supplementary financial information, is available on http://www.sasol.com.

Sasol will be hosting a conference call to discuss its financial results with analysts and investors at 15.00 SA time (14.00 UK, 09.00 EST) today. The conference call will be webcast, and can be accessed at http://event.on24.com/r.htm?e=840185&s=1&k=C0FAF0F7D12828D792D252E94B1E4BE3

The conference call webcast can also be accessed from on http://www.sasol.com.

* All comparisons refer to the prior year comparative period, as restated for the adoption of the new consolidation suite of accounting standards unless otherwise stated (refer to the basis of preparation and accounting policies section of this announcement for details thereon). The 2011 and 2010 financial years have not been restated for the adoption of the new consolidation suite of accounting standards.

**Remeasurement items include our equity accounted joint ventures.

SOURCE Sasol Limited