Sasol Limited: Trading Statement for the Financial Year Ended 30 June 2017

JOHANNESBURG, July 25, 2017 /PRNewswire/ --

Sasol's earnings per share (EPS) for the financial year ended 30 June 2017 are expected to increase by between 48% and 58% (approximating R10,40 to R12,56 per share) compared to the 2016 financial year (prior year) EPS of R21,66. Headline earnings per share (HEPS) for the same year are expected to decrease by between 11% and 21% (approximating R4,55 to R8,69 per share) from the prior year HEPS of R41,40. The prior year EPS was negatively impacted by the R9,9 billion impairment of our Canadian shale gas assets.

Sasol delivered a strong business performance across most of the value chain, with our Secunda Synfuels Operations reporting record volumes and our Eurasian Operations delivering their highest production volumes since 2015. However, continued volatility in the macro-economic environment, particularly the stronger rand and low oil price, has adversely impacted our financial performance. Excluding the effect of our hedging programme, the average rand/US dollar market exchange rate strengthened by 6% from R14,52 in 2016 to R13,61, and the closing rand/US dollar market exchange rate strengthened by 11% from R14,71 to R13,06. This was partially offset by a 15% higher average Brent crude oil price of US$49,77/bbl (30 June 2016 - US$43,37/bbl).

The highlights of our operational performance can be summarised as follows:

• Secunda Synfuels Operations increased production volumes by 1% to a record 7,83 million tons;
• Natref production volumes decreased by 5%. Plant shutdowns during the first half of the year contributed to a 3% decrease in production volumes and the plant incident on 22 May 2017, which resulted in unintended downtime, led to a 2% reduction in production volumes;
• Our Eurasian Operations increased production volumes by 6% on the back of stronger product demand;
• ORYX GTL achieved a utilisation rate of 95% compared to 81% in the previous year;
• Our Performance Chemicals business reported a 2% increase in sales volumes, which is at the upper end of our market guidance, mainly as a result of stronger demand, higher chemical margins and improved plant stability. Our Base Chemicals sales volumes increased by 3%, slightly below market guidance, due to a fire at one of our third party warehouses; and
• Liquid fuels sales volumes in our Energy Business decreased by 2% due to a higher portion of production volumes from Secunda Synfuels Operations allocated to our higher margin yielding chemical businesses and lower Natref production volumes.

Sasol's earnings were impacted by the following notable once off and period close items:

   
                                                                  HEPS     EPS
    Translation losses arising from a stronger closing rand/US
    dollar market exchange rate at 30 June 2017                (R2,53) (R2,53)
    Mark-to-market valuation of oil and foreign exchange
    hedges using a forward rate at 30 June 2017                 R2,05   R2,05
    Net remeasurement items                                         -  (R1,82)
    Increase in rehabilitation provisions                      (R0,51) (R0,51)
    Provision for tax litigation claims                        (R1,49) (R1,49)
    Impact of labour actions at Sasol Mining in the first half
    of the financial year                                      (R1,06) (R1,06)

Included in remeasurement items is a partial impairment of our North American GTL project amounting to R1, 7 billion (US$130 million) and the reversal of a partial impairment of the Lake Charles Chemicals Project (LCCP) amounting to R0, 8 billion (US$65 million), which resulted from lower spot discount rates and the extension of the useful life of the project to 50 years.  

A detailed production summary and key business performance metrics for the financial year for all our businesses is available on our website, http://www.sasol.com. Our results for the financial year may be further affected by adjustments resulting from our financial year-end closure process. This may result in a change in the estimated earnings noted above. All references to years refer to the financial year ended 30 June.

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 year ended 30 June 2017 will be announced on Monday, 21 August 2017.

Sponsor: Deutsche Securities (SA) Proprietary Limited

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Investor relations:
Cavan Hill
Senior Vice President
Investor Relations
Telephone: +27(0)10-344-9280

SOURCE Sasol Limited