Sasol Update 2/2020 zero Dividende, Lake Charles
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...“Given the current environment, we must take all necessary measures to proactively manage this market volatility and uncertainty. The decision to implement a salary sacrifice is regrettable, but this is a short term measure necessary to help secure Sasol’s long-term future.”...
https://www.sasol.com/media-centre/media-releases/...s-amid-continued
...A number of other research firms have also recently commented on SSL. JPMorgan Chase & Co. raised shares of Sasol from a neutral rating to an overweight rating in a research note on Monday, June 8th. Zacks Investment Research raised shares of Sasol from a sell rating to a hold rating in a research report on Wednesday, March 25th. Goldman Sachs Group cut shares of Sasol from a buy rating to a hold rating in a research report on Friday, March 20th. Finally, Renaissance Capital upgraded shares of Sasol from a sell rating to a hold rating in a report on Thursday, February 27th. One equities research analyst has rated the stock with a sell rating, five have issued a hold rating and three have given a buy rating to the company. Sasol presently has an average rating of Hold and a consensus target price of $22.00...
SOL: Sasol Limited - Sasol Update on Response to Oil Price Volatility and COVID-19 Pandemic
JOHANESBURG, June 18, 2020 /PRNewswire/ -- Sasol continues to make significant progress on the response plan measures announced on 17 March 2020 and 23 April 2020, to address the impacts of oil price volatility and the COVID-19 pandemic (COVID-19).
The situation remains highly dynamic, but as lockdown regulations are eased in South Africa and elsewhere, Sasol is now ramping up operations whilst taking action to ensure the safety of employees and service providers.
This announcement includes the following:
Operational performance update
Covenant update
Status on financial position
Future positioning of Sasol
Change in Director's executive responsibilities and new Group Executive Committee structure
OPERATIONAL PERFORMANCE UPDATE
As previously communicated, an unprecedented decrease in fuel demand in South Africa as a result of COVID-19 resulted in us reducing our production rates at Secunda Synfuels Operations (SSO) and suspending production at the Natref Refinery in Sasolburg, in a joint decision with Sasol's partner, Total South Africa.
Sasol used this period of lower production to bring forward its planned September 2020 maintenance shutdown at SSO. This shutdown was successfully completed in May 2020 and ensures production will be uninterrupted for the remainder of the calendar year. Similarly, maintenance work planned for later during calendar year 2020 at Natref was successfully completed during the lockdown period.
Since the lockdown restrictions in South Africa were eased on 1 June 2020, SSO has ramped up production, and Natref is expected to start production by the end of June 2020 and will ramp up to full capacity as jet fuel demand resumes. The ammonia, nitric acid and chlor-vinyl plants in Sasolburg also started up in May 2020.
Outside South Africa, Sasol's operations are performing to plan. Oryx GTL's train 1 came back into operation at the beginning of June 2020, and train 2 is expected to be back in production in the second quarter of financial year 2021 following the extended planned shutdown of the plant.
Sasol previously guided the beneficial operation of the Ziegler and Guerbet units at the Lake Charles Chemicals Project (LCCP) by end June 2020 and is pleased to announce that the Ziegler unit achieved beneficial operation on 16 June 2020 and the Guerbet unit's beneficial operation is imminent. Remediation work on the low density polyethylene (LDPE) unit is progressing according to plan, and we expect to bring this unit into production before the end of the third quarter of calendar year 2020.
COVENANT UPDATE
Sasol is pleased to announce the successful conclusion of discussions with lenders regarding increased balance sheet flexibility in the context of COVID-19 impacts and market volatility. Our lenders have agreed to waive the covenant at June 2020 and lift the December 2020 covenant from 3 times to 4 times Net Debt : Earnings Before Interest, Taxation, Depreciation and Amortisation (EBITDA).
This additional flexibility is subject to conditions which are customary for such covenant amendments and consistent with Sasol's broader capital allocation framework. These include provisions to prioritise debt reduction at this time, such as commitments that there will be no dividend payments nor acquisitions while Sasol's leverage is above 3 times Net Debt : EBITDA. Sasol will also reduce the size of its facilities as debt levels are reduced, whilst continuing to maintain a strong liquidity position.
In conjunction with these amendments and in light of Sasol's two notch credit rating downgrade earlier this year, the interest costs across Sasol's debt facilities will increase by approximately US$40 million per annum, before any reduction in borrowings through any self-help measures or disposals. The applicable interest rate will reduce in the event that Sasol's credit rating improves.
UPDATE ON FINANCIAL POSITION
Management continues to progress with the execution of its crude oil hedging programme for financial year 2021. For quarter 1 financial year 2021, approximately 80% of Synfuels' liquid fuels exposure was hedged, translating to 6 million barrels. This consists of 2,5 million barrels of zero cost collars at a put strike price of US$31 per barrel and a call strike price of US$39 per barrel, and 3,5 million barrels of put options at an average net strike price of US$37 per barrel. Oil hedges for the remainder of financial year 2021 are in progress with 2 million barrels using put options hedged at an average net strike price of US$30 per barrel and 0,5 million barrels hedged using zero cost collars at a put strike of US$36 per barrel and a call strike of US$45 per barrel. These oil hedges will significantly protect liquidity during the forthcoming months
Sasol made significant progress with the implementation of its self-help measures as communicated on 17 March and 23 April 2020. For financial year 2020 Sasol is well on track to achieve the targets set, whilst for financial year 2021 plans to achieve the targets set have been developed to a high level of probability.
Sasol reaffirms that liquidity headroom will remain well above US$1 billion, with improved liquidity balances in Sasol's US dollar and Rand liquidity facilities. Several focussed management actions over the past couple of months have improved our liquidity position.
Sasol remains committed to the delivery of its response plan to bring leverage back in line with target levels and mitigate the impacts of recent market volatility and COVID-19.
The process to accelerate and expand our asset disposal programme has yielded good progress for several of Sasol's assets despite the macro environment volatility in recent months. Any divestment or similar activity will be executed in line with balance sheet, shareholder value and strategic objectives, including the potential for partnering options at Sasol's US Base Chemicals business.
Further updates on the progress of the disposal transactions will be made as and when appropriate.
POSITIONING SASOL FOR THE FUTURE
As previously communicated, a key part of Sasol's response plan is to look beyond the near-term measures and position the business for sustained profitability in a low oil price environment. The new strategy will focus on Sasol's core portfolios of chemicals and energy. A focused and robust review of the business, and the associated workforce structures, is underway and a detailed update will be provided to stakeholders alongside the full year results.
A key decision as a result of this includes the discontinuation of all oil growth activities in West Africa. The reset of the strategy necessitates a revised operating model, which is still under development and will be announced in the second quarter of financial year 2021.
The review has identified that the future Sasol business – "Sasol 2.0" – will be focused on two core businesses, Chemicals and Energy (the Businesses). The revision of our strategy aims to have a greater focus on enhanced cash generation, value realisation for shareholders and business sustainability. The Chemicals Business will focus on its activities in specialty chemicals where it has differentiated capabilities and strong market positions which can be expanded over time. The Energy Business will comprise the Southern African value chain and associated assets and will pursue greenhouse gas emission reduction (GHG) through focus on gas as a key feedstock and renewables as a secondary energy source. This will be a key enabler to achieve the 2030 and longer term aspirations to shift to a lower carbon economy.
Our two market-facing Businesses will each be responsible for its own profit and loss, management of resources and capabilities. A lean corporate centre will enable the Businesses by fostering synergies and integrating activities, setting strategic boundaries and allocating capital.
The redesign of the organisation to enable our sustainability at lower oil prices will have an impact on our workforce structure. We have accordingly issued a notice to our representative trade unions in South Africa in terms of section 189 of the Labour Relations Act number 66 of 1995, inviting them to enter into consultation with Sasol. A similar process will be followed with the relevant recognised bodies in our other jurisdictions.
Change in Director's executive responsibilities and new Group Executive Committee structures
As a first step towards this long-term trajectory, the new senior leadership end-state structure will consist of the President and Chief Executive Officer (CEO) and six Executive Vice President (EVP) portfolios. An additional EVP Sasol 2.0 Transformation role will be in place for up to 24 months to help execute our restructuring initiative and mitigate risks to ongoing operations. Changes in the roles of EVPs will be effective from 1 November 2020. This new structure will also increase our gender and diversity representation at GEC level.
The EVP portfolios will be structured as follows:
The Energy Business Unit will comprise two EVP portfolios;
Priscillah Mabelane, whose appointment we announced on 2 June 2020, will lead Sasol's liquid fuels marketing and sales activities, upstream gas, sourcing and marketing, and supporting functions associated with the Energy value chain.
Bernard Klingenberg will lead operations and technical functions within the Energy value chain, as well as mining, to ensure continuity in our ability to deliver across our integrated value chain.
The Chemicals Business Unit will be led by Brad Griffith. He will be fully accountable for the full end-to-end chemicals business, from feedstock sourcing through operations, marketing and sales and associated supporting activities and functions.
The Corporate Centre will be made up of three EVP portfolios:
Chief Financial Officer, Paul Victor.
Human Resources and Stakeholder Relations, led by Charlotte Mokoena.
Strategy, Sustainability and Integrated Services, led by Executive Director Vuyo Kahla. Corporate portfolio strategy, sustainability, enterprise-wide risk management as well as enterprise-wide SHE policy and reporting will be added to his current responsibilities. Supply chain will move from his current portfolio of responsibilities and form part of the business units.
In addition to the permanent roles described above, Marius Brand will be appointed as EVP Sasol 2.0 Transformation to lead the Group-wide Transformation Programme to Sasol 2.0 and delivering the long-term sustainability targets by the third quarter of financial year 2021.
Further details of our repositioning process will be provided at the August 2020 results release.
Disclaimer - 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, expectations, developments and business strategies. Examples of such forward-looking statements include, but are not limited to, the impact of the novel coronavirus (COVID-19) pandemic on Sasol's business, results of operations, financial condition and liquidity and statements regarding the effectiveness of any actions taken by Sasol to address or limit any impact of COVID-19 on its business; statements regarding exchange rate fluctuations, changing crude oil prices , volume growth, increases in market share, total shareholder return, executing our growth projects (including LCCP), oil and gas reserves, cost reductions, our climate change strategy and business performance outlook. Words such as "believe", "anticipate", "expect", "intend", "seek", "will", "plan", "could", "may", "endeavour", "target", "forecast" 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 and others are discussed more fully in our most recent annual report on Form 20-F filed on 28 October 2019 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.
For further information, please contact:
Sasol Investor Relations,
Feroza Syed, Chief Investor Relations Officer
Direct telephone: +27 (0) 82-557-7740
investor.relations@sasol.com
Sasol reaffirms that liquidity headroom will remain well above US$1 billion, with improved liquidity balances in Sasol's US dollar and Rand liquidity facilities. Several focussed management actions over the past couple of months have improved our liquidity position.
HOUSTON, June 23, 2020 /PRNewswire/ -- Sasol today announced that the Guerbet alcohol unit at our Lake Charles Chemicals Project (LCCP) achieved beneficial operations on 19 June 2020. This follows three days after achieving beneficial operations on the Ziegler alcohol unit, bringing the online capacity of LCCP's specialty chemicals units to 100 percent and LCCP's total online nameplate capacity to 86 percent.
The beneficial operations of these LCCP facilities progresses Sasol's seven-unit U.S. Gulf Coast mega project to the cusp of completion," said Sasol President and Chief Executive Officer, Fleetwood Grobler. "The additional capacity strengthens Sasol's leadership position in the specialty alcohol and alumina markets, which is core to the company's Chemicals growth strategy."
"Our investment in Lake Charles – including the additional ethoxylation capacity that began operation in January 2020 – combined with the startup of our new ethoxylation unit in Nanjing, China in 2019, strengthens our existing asset base," said Sasol Executive Vice President: Chemicals Business, Brad Griffith.
"With this expansive global footprint, we continue aligning our business with powerful global megatrends to identify high-value growth opportunities we can support with our unique chemistries. These megatrends underpin our strategy of providing solutions to a growing and urbanising middle class focused on health, hygiene and sustainability. Through collaborative innovation with our customers, we are committed to developing sustainable solutions which form a part of the developing circular economy," said Mr Griffith.
The Ziegler and Guerbet alcohols expand Sasol's position in having the broadest integrated alcohols and surfactants portfolio in the world. Sasol is a recognised leader in chemicals for essential care markets such as laundry, home care, personal care and hygiene.
Sasol is also well-positioned to offer specialty, performance-based chemicals and tailor-made solutions to customers in a wide range of industrial applications including agrochemicals, abrasives, metalworking and lubrication, oil and gas, automotive, and paints and coatings.
The LCCP Ziegler unit is an extension of the existing Ziegler plant in Lake Charles and is the largest of its kind in the world adding nameplate capacity of 173,000 tons per year (173 ktpa) of alcohol and 32,000 tons (32 ktpa) of alumina. This addition strengthens Sasol's significant economies of scale, leveraging the company's deep technical and operating experience.
The Ziegler unit supplements Sasol's global production of alcohols and aluminas, adding to existing Ziegler capacity in both Lake Charles and Brunsbuettel, Germany. The unit is the most technically complex of the units in the LCCP and is based on Sasol's proprietary technology. Benefited by the most modern technology and years of experience with this unique process, the Ziegler unit started up smoothly, within market guidance through the sterling efforts of our project and operations teams.
The additional alumina capacity from the Ziegler unit will enable Sasol to supply the increasing market demand for tailor-made, high purity alumina products used in a variety of market applications such as catalysts, films, ceramics and abrasives. The expansion will support the growth aspirations of customers requiring Sasol's unique alkoxide based alumina products.
Sasol's new Guerbet unit on the U.S. Gulf Coast is the company's second Guerbet alcohol production site; the other is also located in Brunsbuettel. The unit in Lake Charles is the largest Guerbet alcohol plant in the world and has a nameplate capacity of 30,000 tons per year (30 ktpa).
The Guerbet unit is a two-fold scale-up of Sasol's proprietary technology used in Brunsbuettel. The project and operations teams from both Lake Charles and Brunsbuettel worked exceedingly well to bring the Guerbet unit onstream without problems. The positioning of Sasol's Guerbet alcohol production sites in Europe and North America is unrivaled and provides our customers with expanded access to a more efficient and sustainable global supply chain.
The last remaining unit to come online at LCCP will be the low density polyethylene (LDPE) plant. This is on track for beneficial operations by the end of September 2020, as per previous guidance. At the end of May 2020, the LCCP capital expenditure was tracking the previously communicated guidance of US$12,8 billion.
To date, the LCCP has generated more than 800 full-time quality manufacturing jobs, with up to 6,500 people on site during construction, with nearly US$4 billion spend on construction to Louisiana businesses and nearly US$200 million paid in local and state taxes.
About Sasol:
Sasol is a global integrated chemicals and energy company. Through our talented people, we safely and sustainably create superior value for our customers, shareholders and other stakeholders. We integrate sophisticated technologies in world-scale operating facilities to produce and commercialise commodity and specialised chemicals, gaseous and liquid fuels, and lower-carbon electricity.
Issued by:
In South Africa:
Alex Anderson, Senior Manager: Group External Communication
Direct telephone: +27 (0) 10-344-6509; Mobile: +27 (0) 71-600-9605;
alex.anderson@sasol.com
In the U.S.:
Kim Cusimano, North American Operations Corporate Affairs
Direct telephone: +1 (225) 776-0758
kim.cusimano@us.sasol.com
A buyer’s guide to Sasol’s $5bn asset sale process
By Paul Burkhardt Time of article published 14h ago
JOHANNESBURG - Sasol Ltd. has accelerated an asset disposal program that could eliminate more than half of the company’s debt.
The South African company is trying to raise cash amid cost overruns and lower oil prices. The process could be done in a year and take in as much as $5 billion, which would help prevent a last-resort rights offering.
There is plenty to sell, Chief Financial Officer Paul Victor said in an interview.
“The best possible value and the highest possible chance of a divestment, they go first,” Victor said. While each asset has its own timeline for disposal, the company intends to complete all sales by June 2021. A decision on the rights offer is due in the next few months.
Sasol said last week that it will focus on core chemical and synthetic-fuel divisions and discussions over job cuts have started. After a review of global assets, partnering is an option in some cases, while closing a unit may also be necessary, according to Victor. Sasol wants “high-yielding” returns from its businesses, he added.
Here are some of the guidelines around the ongoing sales:
U.S. Chemicals
Sasol’s “highest priority” in the process is a stake in the Lake Charles Chemicals Project in Louisiana, which has increased in cost to almost $13 billion and has received multiple bids. The company aims to have that sale at a well-developed stage by the end of December, Victor said. Specialist chemical production is considered part of the core business, while base chemicals take a lot of volume to stay competitive and the preference would be to sell a portion of that.
Core Operations
The Johannesburg-based company converts coal and gas into synthetic fuels and produces chemicals used in packaging, footwear and cosmetics. The operations in South Africa are at the heart of the company’s business and are not on the block. In order to reduce its carbon footprint, renewable energy may be purchased to help power the plants.
Oil and Gas
Sasol is still evaluating whether to sell its share of the Natref crude-oil refinery of which it owns 64%, with Total SA holding the remainder. Keeping the plant could require investing in upgrades to produce cleaner fuel. The company’s West African oil assets will be sold. Natural gas operations in Mozambique will be retained.
“Mozambique is part of our future -- it helps us to decarbonize our footprint,” Victor said. Sasol’s shale gas assets in Canada were on the block earlier than anything else and a buyer could take them “at value,” he said.
BLOOMBERG
Sasol divests Escravos gas-to-liquids plant to Chevron
Jul. 1, 2020 5:09 PM ET|About: Sasol Limited (SSL)|By: Vandana Singh, SA News Editor
Sasol (NYSE:SSL) to sell its indirect interest in the Escravos gas-to-liquids (EGTL) plant in Nigeria to Chevron (NYSE:CVX) for an undisclosed amount.
Sasol said it would continue to support Chevron in the performance of the EGTL plant through ongoing catalyst supply, technology and technical assistance.
The company said other sale processes, including its interests in Mozambique Pipeline Investment Company pipeline and Central Termica de Ressano Garcia gas-fired power plant in Mozambique, are also underway.
In March, Sasol had announced asset disposal program and said that it could sell up to $2B of its shares to pay down its debt.
SALE OF AIR SEPARATION UNITS BY SASOL SOUTH AFRICA LIMITED
JOHANNESBURG, July 29, 2020 /PRNewswire/ -- Sasol is pleased to announce that Sasol South Africa Limited ("SSA"), a Major Subsidiary of Sasol, has signed an exclusive negotiation agreement with Air Liquide for the sale of its sixteen air separation units located in Secunda to Air Liquide Large Industries South Africa Proprietary Limited ("Air Liquide"). The proceeds will total approximately R8,5 billion.
The air separation units, which have a capacity of up to 42 000 tons per day, provide oxygen for Sasol's fuels and chemical production processes in Secunda as well as producing various other gases utilised at the site. Air Liquide will supply the gases to SSA's operations under a long-term gas supply agreement. It is anticipated that Air Liquide's expertise would allow, in coordination with Sasol, a targeted reduction in greenhouse gas emissions (GHG) associated with the oxygen production over the coming years, which will contribute towards the GHG reduction for the overall Secunda site.
Air Liquide has been present on the Secunda site since 1979, and already owns and operates the seventeenth air separation unit, which was commissioned in January 2018. Air Liquide owning and operating the full air separation fleet is expected to provide optimisation of management of the assets and energy efficiency benefits.
The transaction remains subject to further due diligence, finalisation of relevant definitive agreements and associated internal and external approvals, including the Competition Commission and the South African Reserve Bank. The parties aim to negotiate final agreements by mid-August, and a further announcement will be made at that time. The transaction is currently expected to close within financial year 2021.
This transaction forms part of Sasol's accelerated divestment programme as part of Sasol's comprehensive response plan announced on 17 March 2020.
RELEASE OF TRADING STATEMENT UPDATE
Our accelerated asset disposal programme is impacting the completion of our year-end processes. We anticipate the release of a trading statement update early in August 2020.
FURTHER CAUTIONARY ANNOUNCEMENT
Sasol refers to the SENS announcements released on the Stock Exchange News Service ("SENS") on 17 March 2020, outlining a comprehensive response strategy designed to mitigate the impact of a lower oil price and COVID-19. The strategy includes a cash conservation programme, an accelerated and expanded asset disposal programme, as well as a potential rights issue of up to US$2 billion which remains subject to the progress of other initiatives. A further SENS announcement was released on 1 July 2020, updating investors on the progress regarding the asset disposal programme.
Sasol shareholders are advised that implementation of the response strategy is underway, the outcome of which may have a material effect on the price of the Company's securities. Accordingly, shareholders are advised to continue exercising caution when dealing in the Company's securities until full announcements on the disposal of the air separation units, the asset disposal programme and the potential rights issue are made.
Hanwha loses to Chevron in a bid to acquire 50% stake in US-based ethane cracker
2020-08-06
Hanwha Group has lost to US-based chemical company Chevron Phillips in a bid to acquire a 50% stake in global chemical company Sasol’s ethane cracking center (ECC) located in Louisiana, for which the South Korean conglomerate offered more than $3 billion.
Hanwha’s offer was believed to be much lower than Chevron’s bidding price in the competition which attracted other energy giants such as ExxonMobil, LyondellBasell, and Ineos. The heated rivalry eventually hiked up the price to 4 trillion won ($3.3 billion), double the initial projection.
“Not only was there a significant price gap between Hanwha and Chevron, but the tables turned for good when Chevron eagerly accepted selling terms,” explained a source familiar with the deal on August 6.
Hanwha Solutions, the chemical arm of Hanwha Group, was one of the final and the only Korean bidder in the official tender. Other local bidders including LG Chem and private equity firm SJL Partners dropped out after the preliminary bid.
Hanwha was quite active in its efforts, creating a consortium with Daishin PE to raise about 2 trillion won. The company had planned to raise the remaining 2 trillion won in acquisition financing from multiple commercial banks.
Sasol has actively invested in the Lake Charles ECC complex in the US since 2014, injecting over $12 billion in the development process which significantly increased the company’s debt.
Earlier in March, Sasol announced that it would consider selling some of its assets as part of the company’s measures to address financial challenges intensified by the global pandemic and the decline in oil and chemical prices.
This offered an attractive opportunity for industry peers to acquire a valuable asset at a modest price given that the 50% stake was valued around late 2 trillion at an early stage.
Hanwha was keen on acquiring a stake in Sasol to diversify its business structure. The Korean conglomerate operates a naphtha cracking center (NCC) which distills crude oil to extract the naphtha required for ethylene. The company had taken a growing interest in ECC because it uses shale gas to make ethylene which is cheaper and less volatile in production costs compared to naphtha.
Meanwhile, there had been concerns regarding the deal as it posed burdensome conditions for local players. When determining assets for sale, Sasol decided to sell mostly general products such as ethylene instead of high-value-added products within the ECC complex which prompted LG Chem to drop out of the bid.
There were also concerns about post-merger integration given that it would be difficult for domestic companies to control local staffing compared to global chemical companies that have more resources.
By Jun Ho Cha
JOHANNESBURG, Aug. 11, 2020 /PRNewswire/ -- Sasol will announce group financial results for the year ended 30 June 2020 (2020 financial year) that were impacted by the COVID-19 pandemic and a severe decline in crude oil and chemical product prices. The impact of the weak macro-economic environment was partly mitigated by a strong cash cost, working capital and capital expenditure performance.
Shareholders are advised that, for the 2020 financial year:
The loss per share is expected to be between R146,75 and R148,15 compared to the prior year earnings per share of R6,97 (representing a decline of more than 100%);
Headline loss per share is expected to be between R8,72 and R14,86 compared to the prior year headline earnings per share (HEPS) of R30,72 (representing a decline of more than 100%); and
Core HEPS (CHEPS**) is expected to be between R11,02 and R18,56 compared to the prior year CHEPS of R37,65.
Sasol's adjusted earnings before interest, tax, depreciation and amortisation (adjusted EBITDA*) is expected to decline by between 17% and 37% from R47,6 billion in the prior year, to between R30,0 billion and R39,5 billion. This results from a 18% decrease in the rand per barrel price of Brent crude oil coupled with much softer global chemical and refining margins impacting our gross margins adversely, especially during the second half of the 2020 financial year. The cash fixed cost performance for the second half of the year improved markedly, partly offsetting the impact of lower gross margins.
The loss per share was as a result of the decrease in the adjusted EBITDA as well as notable non-cash adjustments to earnings. The largest contributor relates to impairments of a number of cash generating units following the decline in the long-term macro-economic outlook, and the fair value impact following the commencement of partnering discussions for our Base Chemicals assets in the United States. Aggregate pre-tax impairment charges of approximately R112 billion have been recognised in the 2020 financial year. The impairments and fair value adjustments have impacted the reporting segments as follows:
Energy R12,5 billion across the portfolio;
Base Chemicals R71,3 billion, primarily in the United States; and
Performance Chemicals R27,7 billion, primarily relating to its share of ethylene producing assets in the United States.
Other non-cash adjustments include:
Unrealised losses of R7,4 billion on the translation of monetary assets and liabilities due to the 23% weakening of the closing rand/US dollar exchange rate; and
Unrealised losses of R4,8 billion on the valuation of financial instruments and derivative contracts.
Depreciation of R3,9bn attributable to those Lake Charles Chemicals Project (LCCP) units that reached beneficial operation.
The financial information on which this trading statement is based has not been reviewed and reported on by the Company's external auditors.
Sasol will release its Annual Financial Results on Monday, 17 August 2020, for the year ended 30 June 2020. Given the prevalence of the COVID-19 pandemic, and the associated restrictions placed on public gatherings, Sasol has decided to pre-record its results presentation. Sasol's President and Chief Executive Officer, Fleetwood Grobler, and Chief Financial Officer, Paul Victor, will present the results. The pre-recorded presentation will be available on 17 August 2020 on the following link: https://www.corpcam.com/Sasol17082020.
A conference call will also be hosted via webcast at 15h00 (SA) with Fleetwood Grobler and Paul Victor to discuss the results and provide an update of the business. Please confirm your participation by registering online: https://www.corpcam.com/Sasol17August2020
* Adjusted EBITDA is calculated by adjusting operating profit for depreciation, amortisation, share-based payments, remeasurement items, change in discount rates of our rehabilitation provisions, all unrealised translation gains and losses, and all unrealised gains and losses on our derivatives and hedging activities.
** Core HEPS is calculated by adjusting headline earnings with non-recurring items, earnings losses of significant capital projects (exceeding R4 billion) which have reached beneficial operation and are still ramping up, all translation gains and losses (realised and unrealised), all gains and losses on our derivatives and hedging activities (realised and unrealised), and share-based payments on implementation of BBBEE transactions. Adjustments in relation to the valuation of our derivatives at period end are to remove volatility from earnings as these instruments are valued using forward curves and other market factors at the reporting date and could vary from period to period. We believe core headline earnings are a useful measure of the group´s sustainable operating performance.
Adjusted EBITDA and Core HEPS are not defined terms under IFRS and may not be comparable with similarly titled measures reported by other companies. The aforementioned adjustments are the responsibility of the directors of Sasol. The adjustments have been prepared for illustrative purposes only and due to their nature, may not fairly present Sasol´s financial position, changes in equity, results of operations or cash flows.
For further information, please contact:
Sasol Investor Relations,
Feroza Syed, Chief Investor Relations Officer
Direct telephone: +27 (0) 82 557 7740
investor.relations@sasol.com
Thu, October 22, 2020, 8:00 AM GMT+2
JOHANNESBURG, Oct. 22, 2020 /PRNewswire/ -- On 27 August 2020, Hurricane Laura made landfall near Sasol´s Lake Charles Chemicals Complex (including Lake Charles Chemicals Project) in Southwest Louisiana. Sasol was making significant progress towards a restart of the LCCC facilities, which had to be suspended as a precautionary measure due to Hurricane Delta. Hurricane Delta made landfall on 9 October 2020.
Preliminary assessments indicated no further damage caused by Hurricane Delta, and we are also pleased to report that our employees have safely resumed their duties. The availability of sufficient industrial-level power from the local provider has resulted in the commencement of a coordinated startup of the complex. The impact of Hurricane Laura on the total net saleable tons of our North American Operations was approximately 170 kilotons in quarter one of financial year 2021.
Seven chemical manufacturing units have returned to operation and all remaining units which were operating prior to Hurricane Laura are expected to return to operation by end October 2020. Commissioning activities of our Low Density Polyethylene unit have resumed, and beneficial operation is still trending towards end October 2020.
Sasol will continue to support its employees and the local community impacted by the hurricanes with relevant resources and assistance.
PRODUCTION AND SALES METRICS FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2020
Sasol has published its production and sales performance metrics for the three months ended 30 September 2020, on the Company´s website at www.sasol.com, under the Investor Centre section or via this URL: https://www.sasol.com/investor-centre/...business-performance-metrics
A business outlook for Sasol North America is also provided in the Business Performance Metrics report.
INVESTOR CONFERENCE CALL
Chief Executive Officer, Fleetwood Grobler, and Chief Financial Officer, Paul Victor, will host a conference call via webcast (https://www.corpcam.com/Sasol22102020 ) at 15:30 (SA time) on 22 October 2020.
Bank of America Corp DE Grows Stock Holdings in Sasol Limited (NYSE:SSL)
Posted by Max Byerly on Oct 22nd, 2020
Sasol logoBank of America Corp DE increased its stake in shares of Sasol Limited (NYSE:SSL) by 37.7% during the second quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The institutional investor owned 41,275 shares of the oil and gas company’s stock after buying an additional 11,291 shares during the period. Bank of America Corp DE’s holdings in Sasol were worth $318,000 as of its most recent filing with the Securities and Exchange Commission.
A number of other hedge funds also recently added to or reduced their stakes in the stock. Flagship Harbor Advisors LLC lifted its holdings in shares of Sasol by 900.0% in the second quarter. Flagship Harbor Advisors LLC now owns 10,000 shares of the oil and gas company’s stock valued at $77,000 after purchasing an additional 9,000 shares in the last quarter. Tower Research Capital LLC TRC lifted its holdings in shares of Sasol by 755.1% in the first quarter. Tower Research Capital LLC TRC now owns 15,110 shares of the oil and gas company’s stock valued at $30,000 after purchasing an additional 13,343 shares in the last quarter. AE Wealth Management LLC purchased a new stake in shares of Sasol in the second quarter valued at about $121,000. Prospera Financial Services Inc purchased a new stake in shares of Sasol in the second quarter valued at about $132,000. Finally, FDx Advisors Inc. lifted its stake in shares of Sasol by 49.9% during the first quarter. FDx Advisors Inc. now owns 17,379 shares of the oil and gas company’s stock valued at $35,000 after buying an additional 5,782 shares during the period. 1.75% of the stock is currently owned by hedge funds and other institutional investors.
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Shares of SSL stock opened at $5.97 on Thursday. Sasol Limited has a one year low of $1.25 and a one year high of $22.73. The company has a debt-to-equity ratio of 1.03, a quick ratio of 1.61 and a current ratio of 1.91. The company has a 50 day moving average price of $7.69 and a 200 day moving average price of $6.92. The firm has a market capitalization of $3.73 billion, a price-to-earnings ratio of 7.28 and a beta of 3.46.
Several brokerages recently issued reports on SSL. Zacks Investment Research raised shares of Sasol from a “hold” rating to a “buy” rating and set a $9.25 price objective on the stock in a research note on Tuesday, August 25th. Canaccord Genuity downgraded shares of Sasol to a “hold” rating and set a $13.50 price objective on the stock. in a research note on Tuesday, July 21st. One equities research analyst has rated the stock with a sell rating, three have issued a hold rating and three have given a buy rating to the company. The stock has an average rating of “Hold” and an average target price of $11.38.