Sasol’s financial results for the year ended 30 June 2023 was impacted by a combination of operational challenges and a volatile global economic landscape which included weaker global economic growth, higher inflation, depressed chemicals prices and higher feedstock and energy costs.

The softening of the Brent crude oil price and refining margins in the latter part of the 2023 financial year was offset by a weakening of the Rand/US Dollar exchange rate. Chemicals basket prices were on a declining trend during 2023, and while we have seen some respite in lower feedstock and energy prices, gross margin and global demand remains depressed particularly in our American and Eurasian operations.

Business performance was further impacted by the underperformance of state-owned enterprises in South Africa, which have constrained our supply chains and resultant sales volumes.

A notable improvement in Sasol’s operational performance was realised in the second half of the 2023 financial year, underpinned by focussed mitigation plans to address the production instabilities experienced earlier in the year. 

Sasol’s adjusted earnings before interest, tax, depreciation and amortisation for the year ended 30 June 2023 is expected to decline by between 2% and 16% from R71,8 billion in the prior year to between R60,6 billion and R70,6 billion.

Shareholders are advised that, for the 2023 financial year:

• Basic earnings per share (EPS) are expected to be between R10,26 and R16,49 compared to the prior year EPS of R62,34 (representing a decrease of between 74% to 84%);
• Headline earnings per share (HEPS) are expected to be between R49,47 and R56,13 compared to the prior year HEPS of R47,58 (representing an improvement of between 4% to 18%); and
• Core HEPS (CHEPS) are expected to be between R41,54 and R51,14 compared to the prior year CHEPS of R68,54 (representing a decrease of between 25% to 39%).

Notable non-cash adjustments (before taxation) for the year ended 30 June 2023 include:

Unrealised gains of R5,8 billion on the translation of monetary assets and liabilities, and valuation of financial instruments and derivative contracts; and net loss of R33,9 billion on remeasurement items, mainly due to:

• full impairment of the South African wax cash generating unit (CGU) of R0,9 billion and Essential Care Chemicals CGU in Sasol China of R0,9 billion, and reversal of the full impairment processed in 2019 on the Tetramerisation CGU in Lake Charles of R3,6 billion
• full impairment of the Secunda liquid fuels refinery CGU at 30 June 2023 of R35,3 billion in our Fuels segment. The Secunda chemicals CGUs recoverable amount remains above the carrying value given the higher value products that are produced. The impairment is mainly as a result of the increase in the weighted average cost of capital (WACC) rate on the back of higher global interest rates and its associated impact on the cost of debt, higher feedstock cost assumptions and a revised production profile based on the emission reduction roadmap (ERR). Sasol has made notable progress with the implementation of its ERR despite mounting external and internal pressures on the business. Optimisation of the ERR is ongoing and there are a number of technology and feedstock solutions being evaluated, however the maturity thereof needs to be progressed before it can be incorporated in the impairment assessment.

KeyFacts Energy: Sasol South Africa country profile