Sasol Integrated Report 2023 - Book - Page 27
INTRODUCTION
ABOUT SASOL
STRATEGIC OVERVIEW
CREATING VALUE
PERFORMANCE
GOVERNANCE AND REWARDS
ADMINISTRATION
CHIEF FINANCIAL OFFICER’S STATEMENT
Dear stakeholders
We believe Sasol can make a significant global
contribution to innovating for a better world.
KEY MESSAGES
Mixed financial performance
Balance sheet resilience
Continued capital returns
to shareholders
Additional Sasol 2.0 commitments
Continued refinement of emission
reduction roadmap
Disciplined capital allocation
Hanré Rossouw // Chief Financial Officer
As we reflect on our financial results it is important to recognise that profitability was impacted not only by
factors within our control, but also by many factors beyond it. We faced various operational challenges as well
as a volatile global landscape that impacted on macroeconomic conditions and market dynamics. Business
performance was further affected by the underperformance of state-owned enterprises in South Africa, which
constrained our supply chains and sales volumes and placed further pressure on our operations. However, our
Sasol 2.0 transformation programme (Sasol 2.0) yielded positive results, countering the impacts of some
of these challenges.
In the first half of the financial year, we benefitted from the rising oil price. In the second half, however,
Sasol was negatively impacted by a 16% softening in the oil price which led to an overall decrease for the year
of 5%. The impact of this was offset by a 17% weakening in the rand/US dollar exchange rate to an average
of R17,77 for the year. Our commodity chemical prices decreased on poor demand. Polyethylene prices
declined by 29% compared to the previous year. Lower ethane and energy prices in the latter part of the year
contributed positively to margins in our Chemicals Business, however overall chemical margins and global
demand remained depressed, negatively impacting this business, particularly in the United States and Europe.
In the second half, we made notable improvements in operational performance, underpinned by focused
mitigation plans to address the production instabilities earlier in the year. We remain committed to improving
the coal quality of our Mining business and restoring volumes at our Secunda Operations, as well as improving
overall productivity at our operations.
We continue to engage with Transnet to address those hurdles that impact our ability to transport certain
chemical products. The challenging macroeconomic environment affecting our Eurasia operations is
expected to continue into the next financial year. While the net margin and demand remain constrained, we will
continue to manage our production rates in response to the lower demand and to avoid a build-up in inventory.
PROFITABILITY
R66 billion adjusted EBITDA*
ROBUST BALANCE SHEET
US$3,8 billion net debt**
CONTINUED CAPITAL RETURNS
R17,00 per ordinary share
SELF-FUNDED TRANSITION
R15 3 25 billion capital
expenditure*** (in FY23 real terms)
We faced various operational challenges as well as a volatile global
landscape that impacted on macroeconomic conditions and market
dynamics.
However, our Sasol 2.0 transformation programme yielded positive
results, countering the impacts of some of these challenges.
delivering 2030 greenhouse gas emission
reduction target
*
Adjusted EBITDA is calculated by adjusting earnings before interest and tax for depreciation, amortisation, share-based
payments, remeasurement items, change in discount rates of environmental provisions, all unrealised translation gains
and losses on our derivatives and hedging activities.
** Net debt excluding leases less cash and cash equivalents.
*** Represents ‘Transform’ capital expenditure which is included in the R26 – R32 billion (in FY23 real terms) annual Sasol 2.0
capital targets.
SASOL INTEGRATED REPORT 2023
26
