Sasol Limited · JSE:SOL
Sasol — H1 2005 Earnings Presentation
49 slides from Sasol's earnings presentation, March 2005
Slide 1: 1h05 results presentation
1 1h05 results presentation JSE: SOL NYSE: SSL
Slide 2: forward-looking statements
forward-looking statements 2 In this report we make certain statements that are not historical facts and relate to analyses and other information based on forecasts of future results and estimates of amounts not yet determinable, relating, among other things, to volume growth, increases in market sh
Slide 3: highlights of 1h05
highlights of 1h05 3 • Oryx GTL project more than 75% complete • Mozambican natural gas introduced to Sasolburg • Uhambo proposal submitted to Competition Commission (merger of downstream fuel operations with Petronas’ SA subsidiary, Engen) • Coal-to-liquids pre-feasibility initiated in China • Arya
Slide 4: 1h05 key financial features
1h05 key financial features 4 • operating profit and attributable earnings up by 65% and 60% respectively • headline earnings per share up by 77% • adverse currency effects partly offset by higher oil prices • margin pressures ease in most chemical businesses and restructuring benefits materialize •
Slide 5: financial results
financial results SAaSOL ; 2 reaching new frontiers
Slide 6: 1h05 market trends – stronger currency, higher product prices
1h05 market trends – stronger currency, higher product prices 6 change 1h04 1h05 vs. 1h04 rand / US$ average rate 7.08 6.21 12% rand / US$ closing rate 6.69 5.66 15% rand / euro average rate 8.18 7.82 4% dated Brent (US$/bbl) 28.73 42.77 49% white product prices (US$/bbl) 37.45 54.84 46% ethylene (U
Slide 7: impact of IFRS changes
impact of IFRS changes 7 effect of changes for half-year ended 31/12/2004 Rm re-assessment of asset useful lives (IAS 16 revised) 561 amendment to amortization of goodwill (IFRS 3) (92) effect on operating profit 469 effect on attributable earnings 293 effect on attributable earnings per share + 5%
Slide 8: 2005 interim results
2005 interim results 8 after accounting before accounting changes changes change change vs. vs. 1h04 1h04 operating profit Rm 6 547 65% 6 078 53% attributable earnings Rm 3 983 60% 3 690 48% headline earnings per share (RSA) cents 703 77% 640 61% (USA) cents 113 102% 103 84% attributable earnings pe
Slide 9: profits increase despite continued Rand strength
profits increase despite continued Rand strength 9 operating profit avg. exchange rate in Rand billion US$1 = Rand 10.97 6.21 2.5 3.8 4.8 5.8 7.0 7.8 7.2 4.7 4.0 5.3 6.5 1h00 2h00 1h01 2h01 1h02 2h02 1h03 2h03 1h04 2h04 1h05
Slide 10: abridged income statement
abridged income statement 10 % change US$ m Rm % change +29% 5 444 turnover 33 806 +13% +38% 1 982 gross profit 12 310 +21% +8% (854) other operating expenditure (5 306) -12% +13% (74) translation losses (457) -24% +88% 1 054 operating profit 6 547 + 65% - 13 income from associates 81 - - (47) net b
Slide 11: headline earnings adjustment
headline earnings adjustment 11 1h05 1h04 change eps Rm Rm Rm cents attributable earnings 3 983 2486 1 497 + 242 adjustments 325 (66) 391 + 64 capital items written-off impairments 242 109 133 + 22 net profit on disposals (42) (34) (8) -1 profit on dilution of interest - (34) 34 +5 scrapping of asse
Slide 12: change in operating profit
change in operating profit 12 operating profit elements in Rand - million December 2003 R3 979m chemical margins / restructuring + 2 800 +70% crude oil + 1 200 +30% accounting changes + 470 +12% currency effect - 1 560 -39% other - 342 - 8% December 2004 R6 547m +65%
Slide 13: financial results - by business unit
13 financial results - by business unit
Slide 14: 1h05 divisional operating profit
1h05 divisional operating profit 14 % change US$ m division Rm % change +18% 86 mining 537 +3% +88% 595 synfuels 3 693 +65% +43% 124 liquid fuels business 767 +26% +173% 76 gas 471 +139% -8% (8) synfuels international (51) +19% - 293% (21) olefins & surfactants (131) - 245% +168% 92 polymers 574 +13
Slide 15: Sasol group - schematic
Sasol group - schematic 15 external feedstocks liquid fuels external markets mining O&S synfuels polymers solvents spi gas wax infrachem nitro
Slide 16: sasol group
sasol group 16 operating profit in rand million • higher operating profit due primarily to: 65% increase • higher international oil prices • improved chemical margins • cost reductions and productivity 6 547 improvements • withdrawal from or disposal of non- 3 979 core or under-performing businesses
Slide 17: mining - schematic
mining 17 external feedstocks liquid fuels external markets mining O&S synfuels polymers solvents spi gas wax infrachem nitro
Slide 18: mining
mining 18 operating profit in rand million • higher operating profit due primarily to 3% increase favourable export selling prices • production cash cost per ton up by 10%, due to lower volumes (7%) 537 521 • operating profit for 2h05 expected to be higher because of higher export revenues 1h04 1h05
Slide 19: synfuels - schematic
synfuels 19 external feedstocks liquid fuels external markets mining O&S synfuels polymers solvents spi gas wax infrachem nitro
Slide 20: synfuels
synfuels 20 operating profit in rand million • increased operating profit mainly due to 65% increase impact of high crude oil prices, net of 3 693 hedge • production output 3% higher • cash unit production costs up <2% 2 240 • operating profit for 2h05 expected to be lower due mainly to reduction in
Slide 21: liquid fuels business - schematic
liquid fuels business 21 external feedstocks liquid fuels external markets mining O&S synfuels polymers solvents spi gas wax infrachem nitro
Slide 22: liquid fuels business
liquid fuels business 22 operating profit in rand million • increased operating profit primarily due 26% increase to higher Rand refining margins and 767 retail sales • awaiting approval from South African 611 Competition Authorities regarding Uhambo • operating profit for 2h05 expected to be lower
Slide 23: gas - schematic
gas 23 external feedstocks liquid fuels external markets mining O&S synfuels polymers solvents spi gas wax infrachem nitro
Slide 24: gas
gas 24 operating profit in rand million • increase in operating profit due to 139% increase introduction of natural gas • good progress being made with co- 471 generation opportunities • higher operating profit forecast for 2h05 197 1h04 1h05 US$ terms: 173% increase
Slide 25: olefins & surfactants - schematic
olefins & surfactants 25 external feedstocks liquid fuels external markets mining O&S synfuels polymers solvents spi gas wax infrachem nitro
Slide 26: olefins and surfactants
olefins and surfactants 26 operating profit in rand million • before negative impact of impairments, write- offs and accounting changes, the 1h05 loss 245% decrease was R4m versus a loss of R34m in 1h04 • while cash positive, operating results stressed especially in the alkylates and (38) monomers b
Slide 27: polymers - schematic
polymers 27 external feedstocks liquid fuels external markets mining O&S synfuels polymers solvents spi gas wax infrachem nitro
Slide 28: polymers
polymers 28 operating profit in rand million • operating profit increase essentially due 135% increase to improved margins • costs well controlled 574 • production and sales volumes adversely affected by ethylene plant incident 244 • 2h05 operating profit expected to be substantially higher 1h04 1h0
Slide 29: solvents - schematic
solvents 29 external feedstocks liquid fuels external markets mining O&S synfuels polymers solvents spi gas wax infrachem nitro
Slide 30: solvents
solvents 30 operating profit in rand million • increased operating profit mainly due 536% increase to higher international and local selling prices and margins 553 • increased volumes from new installed capacity (e.g. acrylates) • marginal reduction in operating profit forecast for 2h05 87 1h04 1h05
Slide 31: wax - schematic
wax 31 external feedstocks liquid fuels external markets mining O&S synfuels polymers solvents spi gas wax infrachem nitro
Slide 32: wax
wax 32 operating profit in rand million • operating profit marginally higher due 9% increase to withdrawal from non-core or poor performing activities • 2h05 operating results expected to be 106 similar to first half 97 1h04 1h05 US$ terms: 25% increase
Slide 33: nitro - schematic
nitro 33 external feedstocks liquid fuels external markets mining O&S synfuels polymers solvents spi gas wax infrachem nitro
Slide 34: nitro
nitro 34 operating profit in rand million • increased operating profit due to 387% increase higher ammonia prices, improved margin management, stringent cost control and withdrawal from non-core 253 or poor performing activities • 2h05 operating results expected to be materially lower than first hal
Slide 35: sasol synfuels international (ssi)
sasol synfuels international (ssi) 35 operating profit in rand million 19% decrease • lower operating loss due to once-off inflow relating to Oryx project, partly negated by cost of increased project- related activities (63) (51) 1h04 1h05 US$ terms: 8% decrease
Slide 36: sasol petroleum international (spi)
sasol petroleum international (spi) 36 operating profit in rand million • increased operating profit due to 275% increase advent of natural gas • exploration activities continue in Mozambique 120 • 2h05 operating results expected to be similar to first half 32 1h04 1h05 US$ terms: 328% increase
Slide 37: 2005 interim dividend
2004 interim dividend 37 dividends per share in SA cents dividend cover 2.8 1.9 • 2005 interim dividend increased by 7% • 2005 interim dividend approximates US$.41 per share – an increase of 17% 230 235 215 • dividend cover of 2.8 returns to within the preferred range of 2.5 to 3.5 times 1h04 2h04 1
Slide 38: fy05 group profit outlook
fy05 group profit outlook 38 assuming exchange rates and international oil and commodity chemical prices remain at more-or-less prevailing levels, it is anticipated that attributable earnings in the second half of the financial year will be at least equal to that achieved during the first six-month
Slide 39: strategy update
strategy update SAaSOL ; 2 reaching new frontiers
Slide 40: strategy links growth drivers with value creation
strategy links growth drivers with value creation 40 growth drivers • grow a global gas-to-liquids (GTL) business • growing chemicals business based on integration with F-T hubs and/or where there is sustainable feedstock advantage • exploit upstream hydrocarbon opportunities
Slide 41: dawning of international GTL era
dawning of international GTL era 41 600 k bbl/day 300 0 2006 2016 targeted gross GTL capacity
Slide 42: sasol synfuels international (SSI)
sasol synfuels international (SSI) 42 • Oryx GTL (Qatar) passes 75% development stage • started feasibility study for expansion to 100 000 bbl/day • evaluating integrated upstream/downstream GTL venture • GTL product marketing activities ramping up • SasolChevron and QP signed MOU for GTL base oils
Slide 43: chemical expansion impetus maintained
chemical expansion impetus maintained 43 chemical sales and ebitda ($ bn) US$ bn 8 0.8 US$ bn 6 ebitda 0.6 4 0.4 2 0.2 sales 0 0 1998 2005E
Slide 44: chemicals scorecard
chemicals scorecard 44 • acrylates complex – stable operations post commissioning • detergent alcohols plant – stable operations post commissioning • 2nd octene train in full production • restructuring of portfolio highly successful • streamlining process continues
Slide 45: upstream portfolio set to gain critical mass
upstream portfolio set to gain critical mass 45 500 MMBoe 250 0 1998 1999 2000 2001 2002 2003 2004 proven & probable reserves
Slide 46: safety remains our top priority
safety remains our top priority 46 3.0 recordable cases per 200 000 hours • tragic and regrettable incidents especially disconcerting in light 2.0 of improvement in recordable case rate (RCR) trend • RCR group target of 0.5 by end 2006 fiscal year 1.0 • DuPont safety review to be completed by March
Slide 47: empowerment
empowerment 47 • Black Economic Empowerment (BEE) is progressing on many fronts • Uhambo (downstream liquid fuels) • Mining – lead partner Eyesizwe • Nitro • ChemCity • Gas
Slide 48: thank you
thank you SAaSOL ; 2 reaching new frontiers
Slide 49: Contact persons
49 The copyright in the material contained in this presentation vests in Sasol Limited, and any reproduction, publication, adaptation, broadcast or performance in public of any portion of the material requires the express prior authorisation of Sasol Limited. Contact persons: Johannesburg - Cavan Hi