Sasol expects stronger half year results despite Lake Charles challenges

Sasol SENS statement:

Trading statement and business performance metrics for the six months ended 31 December 2020

Sasol is expected to deliver a strong set of results for the six months ended 31 December 2020 (2021 financial half year), underpinned by a strong cash cost, working capital and capital expenditure performance despite the effects of the Covid-19 pandemic, a severe decline in crude oil prices and softer chemical product prices. In addition, our Lake Charles production was impacted by hurricanes experienced in the US Gulf Coast, resulting in lost production of approximately 300kt for the 2021 financial half year.

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Shareholders are advised that, for the 2021 financial half year:

– The earnings per share is expected to be between R22.76 and R24.07 compared to the prior half year earnings per share of R6.56 (representing an increase of more than 100%);

– Headline earnings per share (HEPS) is expected to be between R18.59 and R19.78 compared to the prior half year HEPS of R5.94 (representing an increase of more than 100%); and

– Core HEPS (CHEPS) is expected to be between R6.94 and R8.79 compared to the prior half year CHEPS of R9.25.

Sasol’s adjusted earnings before interest, tax, depreciation and amortisation (adjusted EBITDA) is expected to decline by between 0% and 10% from R19.8bn in the prior year, to between R17.9bn and R19.8bn. This decline results from a 23% decrease in the rand per barrel price of Brent crude oil coupled with lower sales volumes due to softer demand attributable to Covid-19 lockdowns and the aforementioned hurricanes impacting our gross margins adversely. This was offset by a strong cost performance, supported by delivery towards the $1bn integrated crisis response plan commitment.

Notable non-cash adjustments for the 2021 financial half year include:

– Unrealised gains of R5.4bn on the translation of monetary assets and liabilities due to the 15% strengthening of the closing rand/US dollar exchange rate compared to June 2020;

– Unrealised gains of R4.7bn on the valuation of financial instruments and derivative contracts; and

– R3.3bn gain on the realisation of the foreign currency translation reserve (FCTR), mainly on the divestment of 50% interest in the LCCP Base Chemicals Business.

The financial information on which this trading statement is based has not been reviewed and reported on by the Company’s external auditors.

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