Sasol Integrated Report 2024 - Book - Page 52
INTRODUCTION
ABOUT SASOL
STRATEGIC OVERVIEW
BUSINESSES
ESG
REMUNERATION REPORT
DATA AND ASSURANCE / ADMINISTRATION
CHIEF FINANCIAL OFFICER’S STATEMENT continued
Softer financial performance
WE ARE COMMITTED TO DELEVERAGING AND STRENGTHENING OUR BALANCE SHEET
Adjusted earnings before interest, tax,
depreciation and amortisation (adjusted EBITDA)
decreased by 9% to R60 billion. Cash fixed costs
of R69 billion were 1% above prior year, with
significant progress made in countering the
effects of inflation and weakening of the rand/US
dollar exchange rate. Inflation and exchange rates
accounted for an increase in cost of 6,8%.
Excluding inflation and exchange rates, cost
savings of R4 billion (5,8%) was achieved, arising
from cost optimisation at our operations, lower
labour cost due to reduction in headcount,
increased own electricity generation, lower
professional fees and maintenance spend.
Cash generated by operating activities decreased
by 19% and free cash flow decreased by 60%
compared to the prior year. The reduction in cash
generation for the year was largely driven by an
increase in working capital with the drive to
ensure sustainable levels are maintained, and
lower dividends received from ORYX GTL due to
the extended shutdown of both trains. Net
trading working capital as a percentage of
turnover on a 12-month rolling average basis
was 16,4%, within our target of 15,5% to 16,5%.
Notwithstanding the significant reduction in free
cash flow, we saw a notable improvement in the
second half of the year with free cash flow
generation of R14,5 billion compared to a deficit
of R6,5 billion in the first half, driven by improved
290
50
44,4
200
Rbn
75
60
275
46,5
30
100
20
60,0
45
30
50
0
Jun 22
Turnover
Jun 23
Jun 24
10
15
0
0
Focus remains on protecting the downside risk
of the balance sheet to mitigate the likelihood of
adverse movements in the oil price and the
rand/US dollar exchange rate, with a hedge
cover ratio (HCR) of 20-55% for 2024. The
targeted HCR for 2025 is 20-35%. Our hedging
programme is continuously monitored and will
be updated as necessary, taking into
consideration the risk to the balance sheet.
Free cash flow (Rand billion)*
25
5
66,3
60
40
150
71,8
4
US$bn
273
52,3
Rbn
250
We are committed to deleveraging and
strengthening the balance sheet with action
plans to improve future cash flow generation.
Our liquidity headroom was R75,9 billion
(US$4,2 billion), and remains well above our
target of maintaining liquidity of more than
Net debt excluding leases (US$ billion)*
Adjusted EBITDA (US$ billion)
%
300
Remeasurement items of R55,8 billion net of tax
(R75,4bn gross) were recorded at financial year
end 2024. This included impairments relating
to our American ethane value chain (Alcohols,
Alumina, Ethylene Oxide, Ethylene Glycols and
associated shared assets) cash generating unit
(CGU) of R45,5 billion net of tax (R58,9bn gross),
and Chemicals Africa Polyethylene, Chlor-Alkali
and Wax CGUs of R3,9 billion net of tax
(R5,3 billion gross). The impairments are primarily
driven by external conditions, including a
prolonged weaker market outlook and higher
discount rates. Various initiatives are being
evaluated to improve the business performance
of the International Chemicals Business in
response to these softer market conditions.
The Secunda liquid fuels refinery CGU remains
fully impaired, with R5,7 billion net of tax
(R7,8 billion gross) of costs capitalised during
the year being impaired.
US$1 billion. At 30 June 2024, our total debt
excluding leases decreased to R117,7 billion from
R124,3 billion. This was largely driven by net
debt repayment and a stronger rand/US dollar
closing exchange rate (R18,19 compared to
R18,83 in the prior year). We continue to work
towards reducing our US dollar debt exposure.
In October 2023 R2,4 billion of senior unsecured
notes were issued in the local debt market under
the R15 billion Domestic Medium Term Note
programme, thereby reducing our currency
exposure on US dollar debt by 2%. Our net
debt (excluding leases) at 30 June 2024 was
US$4,1 billion, being an increase from 2023
of US$3,8 billion. Net debt to EBITDA increased
to 1,5 times and gearing increased to 64% as a
result of low EBITDA generation and an increase
in net working capital, with gearing significantly
impacted by the abovementioned impairments.
3,8
3,8
4,1
20,4
20
3
2
10
1
5
Jun 23
Jun 24
Jun 22
Gross margin %
Jun 23
Jun 22
Jun 24
*
SASOL INTEGRATED REPORT 2024
8,1
0
0
Jun 22
18,6
15
Rbn
Turnover (Rand billion) and gross margin (%)
chemicals margins, sustainable working capital
management and focused cost containment.
50
Jun 23
Jun 24
Free cash flow is defined as cash available from operating
activities less first order capital and related accruals.
