Earnings attributable to shareholders decreased by 63% to R7,3 billion from R19,5 billion in the prior period. An interim dividend of R5,70 per share was declared (18,6% lower compared to the prior period).
Profit from operations of R14,9 billion declined by 50%, on the back of challenging and highly volatile global markets.
Average Brent crude oil prices moved dramatically lower by 47%, while the price of Sasol’s basket of commodity chemical prices dropped by 23%. The impact of lower oil and commodity chemical prices was partly offset by a 24% weaker average rand/US dollar exchange rate (R13,62/$ for the six months ended 31 December 2015, compared with R10,99/$).
The average margin for Sasol’s speciality chemicals remained resilient. Sasol continued its cost containment programme and reduced cash fixed costs by 4,5% in nominal terms. Excluding the impact of inflation, exchange rates and once-off costs, cash fixed costs were down by 8,4%. This was achieved by an accelerated sustainable delivery of its Business Performance Enhancement and Response Plan programmes.
“Given a ‘lower-for-much-longer’ oil price scenario, we have intensified and extended the scope of our Response Plan, by derisking and rephasing certain projects, while prioritising capital for the advancement of our growth projects in southern Africa and the USA,” said Sasol President and CEO David Constable.
A company-wide programme, aimed at delivering sustainable cost savings of R4,3 billion by the end of the 2016 financial year, is nearing its completion.
Sasol delivered actual cost savings up to 31 December 2015 of R3,1 billion, on track to meet its savings target forecast of R4 billion, at an annual exit run rate of R4,3 billion by the end of financial year 2016.
READ MORE: More retrenchments expected at Sasol
Cash generated by operating activities lost 21% to R26,7 billion compared with R34 billion in the prior period.
Sasol’s net cash position increased by 15%, from R53 billion in June 2015 to R61 billion as at 31 December 2015, driven largely by the company’s cash conservation initiatives and the favourable impact of the rand/dollar translation effects. Actual capital expenditure during the period amounted to R33,6 billion.
Loans raised during the period amounted to R19,2 billion, mainly for the funding of the Lake Charles Chemicals project. Sasol’s assets and liabilities were significantly impacted by the weaker average rand/dollar exchange rate, resulting in higher than expected translation differences.
Source: News24 Wire