Sasol to deliver strong set of results amid low oil prices
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, its 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.
Sasol´s adjusted earnings before interest, tax, depreciation and amortisation (adjusted EBITDA*) is expected to decline by between 0% and 10% from R19,8 billion in the prior year, to between R17,9 billion and R19,8 billion.
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 company’s gross margins adversely.
This was offset by a strong cost performance, supported by delivery towards the US$1 billion integrated crisis response plan commitment.
* 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 Sasol derivatives and hedging activities.
