Sasol Form 20-F for the year ended 30 June 2021 - Book - Page 73
(Loss)/earnings before interest
and tax . . . . . . . . . . . . . . . .
EBIT margin % . . . . . . . . . . . . .
prices, lower liquid fuels sales volumes resulting from
the impact of the extended COVID-19 lockdown in
South Africa and lower refining margins, partly offset
by the weaker rand/US dollar exchange rate.
Operating costs and expenses net of other income.
Results of operations 2021 compared to 2020
The loss before interest and tax, including
equity accounted earnings, of R11 609 million
represents a decrease in earnings of R22 378 million or
208% compared to the prior year. EBIT margins
decreased by 33% to -19%.
Total turnover decreased by 3% from R62 553
million in the prior year to R60 649 million mainly due
to lower product prices and the stronger rand/US dollar
exchange rate, partly offset by improved Brend crude
oil prices and higher sales volumes. Demand for diesel
recovered to above pre-COVID-19 levels, while petrol
demand remains between 90 to 95% of pre-COVID-19
levels. Jet fuel demand continues to remain constrained.
Liquid fuel sales volumes of 54,2 million barrels were
3% higher than the prior year.
The decrease in earnings before interest and
tax is mainly due to impairments recognised of
R12,4 billion, the impact of lower Brent crude oil
prices, lower sales volumes resulting from the impact
of the extended COVID-19 lockdown in South Africa,
lower refining margins at Natref and lower earnings
from equity accounted investments, partially offset by
the impact of weaker rand/US dollar exchange rate, a
gain recognised on disposal of EGTL and lower
Loss before interest and tax of R18 170
million includes an impairment of R24,5 billion relating
to our Secunda liquid fuels refinery CGU, resulting
mainly from a stronger rand/US dollar exchange rate
and lower long-term oil price outlook over the
remaining life of the CGU which impacted negatively
on the forecasted Basic Fuel Price (BFP), despite the
short-term recovery in oil prices.
Subdued economic activity exacerbated by the
unprecedented drop in demand because of COVID-19
lockdowns led to a 12% decline in liquid fuels sales
Excluding remeasurement items, our
profitability increased more than 100% and gross
margin increased from 31% to 38% compared to the
prior year, mainly due to higher production at Secunda
and the benefit of Natref procuring crude oil at much
lower prices at the start of the year.
ORYX GTL production volumes were 29%
lower compared to the prior year due to the extended
shutdown. Train 1 resumed operation at the beginning
of June 2020. Inspection work performed at the start of
the train 2 shutdown in January 2020 resulted in an
extension of the required shutdown duration. As a
result of the extended shutdown, ORYX GTL
contributed R338 million to earnings before interest
and tax, 70% lower than the prior year comparative of
R1 131 million.
Secunda production volumes of 7,6mt for
2021 were 3% higher than the prior year with the
benefit of the September 2020 phase shutdown which
was replaced by a ‘pitstop’ shutdown in May 2020.
However, the increase in volumes was partly offset by
some operational challenges. At Natref, together with
our partner, we reduced our run rates to respond to
lower market demand.
For further analysis of our results refer
“Integrated Report—Operational performance
summary” as contained in Exhibit 99.6.
ORYX GTL contributed R719 million to
earnings before interest and tax, increasing by more
than 100% compared the prior year due to a solid
operational performance post the extended shutdown
during the first half of the financial year.
Results of operations 2020 compared to 2019
External turnover . . . . . . . . . .
Inter-segment turnover . . . . . .
Total turnover . . . . . . . . . . .
Operating costs and expenses(1) .
Earnings/(loss) before interest
and tax . . . . . . . . . . . . . .
EBIT margin % . . . . . . . . . . .
Total turnover decreased by 20% from
R78 624 million in 2019 to R62 553 million in 2020,
mainly due to the impact of lower Brent crude oil
(53 640) (71 345)