Sasol Form 20-F for the year ended 30 June 2021 - Book - Page 74
(1)
Earnings before interest and tax decreased by
R20 508 million from R3 474 million in 2019 to a loss
of R17 035 million in 2020, while the EBIT margin
decreased from 6% to -31%.
Operating costs and expenses net of other income.
Results of operations 2021 compared to 2020
Total turnover increased by 12% from R54
310 million in 2020 to R60 597 million in 2021, mainly
as a result of a 14% increase in the average basket sales
price (US$/ton) off-set by the weaker rand/US dollar
exchange rate. Sales volumes for the year were 1%
higher compared to the prior year despite the ongoing
COVID-19 global pandemic and a power outage at the
Sasolburg site caused by a severe storm at the end of
December 2020.
The loss in earnings before interest and tax is
largely attributable to impairments of R22,9 billion
across a number of our CGUs within the South African
value chains. The impairments are mainly attributable
to lower commodity chemical sales prices in the short
to medium term and higher costs associated with
feedstocks and utilities. The introduction of the cash
conservation measures in the second half of 2020
helped to keep our cash fixed costs below the prior
year.
Earnings before interest and tax increased by
R23 992 million from a loss of R17 035 million in 2020
to a profit of R6 957 million in 2021, while the EBIT
margin increased from -31% to 11%.
In line with our asset disposal programme, we
concluded the partial divestment (51%) of our
explosive business and the formation of a new
partnership with Enaex S.A. The transaction was
concluded on 30 June 2020. On 1 July 2020, Enaex
Africa in association with Sasol, started officially
operating in South Africa and on the African continent.
The increase in the earnings before interest
and tax is largely attributable to the aforementioned
increase in turnover and reduction in impairments
recognised year on year. Cash conservation measures
during 2021 contributed to the cash fixed costs only
being 1% above prior year, despite the recognition of
labour-related accruals which were absent in the prior
year.
For further analysis of our results refer
“Integrated Report—Operational performance
summary” as contained in Exhibit 99.6.
Chemicals America
Impairments of R9 billion were recognised in
2021 which is R14,9 billion lower than prior year and
relates to our Wax (R7,9 billion) and Chlor-Vinyls
(R1,1 billion) cash-generating units. The 2021
impairments were largely due to higher costs associated
with gas feedstocks, lower planned sales volumes, the
stronger rand/US dollar exchange rate and the planned
divestiture of our sodium cyanide business.
External turnover . . . . . . . . . .
Inter-segment turnover . . . . . .
Total turnover . . . . . . . . . . .
Operating costs and expenses(1) .
Earnings/(loss) before interest
and tax . . . . . . . . . . . . . .
EBIT margin % . . . . . . . . . . .
In line with our asset disposal programme, on
9 July 2021, we concluded an agreement to sell our
sodium cyanide business. This transaction is expected
to be concluded within the next six to twelve months.
(1)
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Revised
2021
2020
(Rand in
millions)
29 358
28 721
2
88
29 360
28 809
(21 244) (106 365)
8 116
28
(77 556)
(269)
Change
2021/
2020
(%)
2
(98)
2
(80)
(110)
Revised
2019
(Rand in
millions)
21 419
5
21 424
(36 806)
(15 382)
(72)
Change
2020/
2019
(%)
34
1 660
34
189
404
Operating costs and expenses net of other income.
Results of operations 2021 compared to 2020
Total turnover increased by 2% from R28,8
billion to R29,4 billion mainly driven by higher sales
prices despite lower sales volumes. The average sales
basket price for the financial year was 24% higher
compared to the prior year due to a combination of
improved demand, higher oil prices and reduced market
supply due to the weather-related events and global
supply chain challenges resulting from the continued
COVID-19 pandemic. Sales volumes were 16% lower
than the prior year, impacted by two hurricanes, the
Arctic winter storm and divestment of a portion of
Sasol’s Base Chemical business.
Results of operations 2020 compared to 2019
Total turnover decreased by 1% from R54
817 million in 2019 to R54 310 million in 2020, mainly
as a result of softer chemical prices across most of our
sales regions and products due to the significant impact
of the COVID-19 pandemic offset by a weaker rand/US
dollar exchange rate. Sales volumes were largely in line
with prior year.
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