Sasol Form 20-F for the year ended 30 June 2021 - Book - Page 71
Productivity of 1 131/t/cm/s was lower than
expected, which necessitated more than planned
external coal purchases to meet demand from Secunda
Operations. To improve productivity sustainably going
forward, we have implemented the full calendar
operations (Fulco) integrated shift system across all
Secunda mines, with the last mine rollout completed in
June 2021, two months earlier than planned. We expect
productivity to increase and external purchases to
decrease as we fully ramp up the Fulco integrated shift
losses on derivative instruments
(including crude oil instruments, foreign
exchange instruments, ethane swaps and
interest rate swaps) of R6 997 million,
mainly due to losses of R6 232 million
recognised on the foreign exchange
derivatives (mainly our foreign exchange
zero cost collars), which resulted from the
weakening in the closing rand/US$
exchange rate (2019 — R2 465 million
For further analysis of our results refer
“Integrated Report—Operational performance
summary” as contained in Exhibit 99.6.
Segment review—results of operations
Reporting segments are identified in the way
in which the President and Chief Executive Officer
organises segments within our group for making
operating decisions and assessing performance. The
segment overview included below is based on our
segment results. Inter-segment turnover was entered
into under terms and conditions substantially similar to
terms and conditions which would have been
negotiated with an independent third party. Refer to
Business segment information of “Item 18—Financial
Statements—Segment information” for further detail
regarding turnover and EBIT per segment.
Results of operations 2020 compared to 2019
Total turnover decreased by 5% from R20
876 million to R19 891 million. Earnings before
interest and tax of R2 756 million represents a decrease
of 41% when compared to the prior year, mainly as a
result of a 30% deterioration in the US dollar export
coal prices, lower export sales volumes and higher
external coal purchases earlier in the financial year.
Our productivity decreased by 4% as a result
of unplanned infrastructure downtime, safety incidents
in the first half of the year and the ongoing geological
complexity challenges at our Syferfontein and Sigma
collieries. This necessitated additional external coal
purchases and the diversion of export quality coal to the
Secunda operations value chain early in the year in
order to sustain inventory levels. Our productivity
recovered in the second half of the year with our fourth
quarter productivity being the best quarter in the year.
Our COVID-19 response plans and mitigating protocols
enabled us to continue operations with minimum
interruptions in 2020.
Refer also to “Integrated Report—Preserving
and maximising value creation – our integrated value
chains” as contained in Exhibit 99.4.
External turnover . . . . . . . . .
Inter-segment turnover . . . . .
Total turnover . . . . . . . . . .
Operating costs and expenses(1)
Earnings before interest
and tax . . . . . . . . . . . . .
EBIT margin % . . . . . . . . . .
(18 477) (17 135)
The operational improvements in the second
half of the year, together with the temporary reductions
in demand from both internal and external customers
due to COVID-19, allowed us to stop the additional
external purchases in the fourth quarter and to build up
our inventory levels to above working capital target
Operating costs and expenses net of other income.
Results of operations 2021 compared to 2020
Total turnover increased by 9% from R19 891
million to R21 704 million. Earnings before interest
and tax of R3 227 million represents an increase of
17% when compared to the prior year, mainly due to
higher sales volumes, higher export sales prices and
lower external coal purchases, offset by higher
depreciation and an unfavourable stock movement.
External turnover . . . . . . . . . . . . .
Inter-segment turnover . . . . . . . . .