Sasol delivers a mixed set of results for H2 2022

JOHANNESBURG – Sasol is expected to deliver a mixed set of results for the six months ended 31 December 2022, benefitting from the stronger oil price, refining margins and weaker Rand/US Dollar exchange rate. This was, however, offset by the impacts of weaker global economic growth, depressed chemicals prices and higher feedstock and energy costs.

Its South African operations also experienced several operational challenges, most notably in the Mining business, where coal productivity and quality have been below plan. This was exacerbated by supply chain constraints related to poor rail performance, unavailability of port infrastructure impacting our sales volumes, as well as power outages impacting our suppliers and customers.

Sasol’s adjusted earnings before interest, tax, depreciation and amortisation (adjusted EBITDA*) for the six months ended 31 December 2022 is expected to be in line with the prior half year of R31,8bn.

Notable non-cash adjustments (before taxation) for the six months ended 31 December 2022 include:

• Unrealised gains of R7,0 billion on the translation of monetary assets and liabilities, and valuation of financial instruments and derivative contracts; and
• Remeasurement items net loss of R6,4bn, mainly due to
• impairment of the Secunda liquid fuels refinery cash generating unit (CGU) of R8,1bn due to an update in macroeconomic price assumptions,
  • including higher electricity price forecasts and lower gas selling prices, and an update to the short-term volume forecast to reflect near-term operational challenges;
• impairment of the South African wax CGU of R0,9bn driven by higher cost to procure gas in the longer term, and lower sales volumes and prices due to increasingly competitive market conditions;
• impairment of the Essential Care Chemicals CGU in Sasol China of R0,9 billion resulting from a combination of lower margins and higher
  • costs largely due to the impact of the prolonged restrictions associated with China’s zero COVID-19 policy and despite these restrictions recently being lifted; offset by
• the reversal of impairment processed in 2019 on the Tetramerization CGU in Lake Charles of R3,6 billion, largely due to a sustained improvement in plant reliability which has increased co-monomer volumes available for sale and longer term contracts having been signed with several customers to improve the overall profitability of the business.

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

Sasol will release its 2023 interim financial results on Tuesday, 21 February 2023.