Sasol Integrated Report 2023 - Book - Page 28
INTRODUCTION
ABOUT SASOL
STRATEGIC OVERVIEW
CREATING VALUE
PERFORMANCE
GOVERNANCE AND REWARDS
ADMINISTRATION
CHIEF FINANCIAL OFFICER’S STATEMENT CONTINUED
MIXED FINANCIAL PERFORMANCE
Cash generated by operating activities increased
by 15% compared to the prior year and was largely
driven by a year-on-year decrease in working
capital, the latter achieved through focused
management intervention to conserve cash.
We will continue to monitor working capital to
ensure that it remains below or within our target of
15,5% to 16,5% on a 12-month rolling average basis.
Maintaining the flexibility of the balance sheet
to navigate the evolving global financial landscape
remained a key focus. During FY23, we worked
to strengthen our balance sheet by issuing a
convertible bond of US$750 million in November
2022 and executing several debt refinancing
transactions to address our 2024 maturities.
Our liquidity headroom was R109,6 billion
(US$5,8 billion) – well above our target of
maintaining liquidity of more than US$1 billion.
We continue to protect the downside risk of
the balance sheet, given that net debt has not
reduced significantly since FY22. The hedging
programme remains in place to mitigate the risk
of adverse movements in the oil price and the
rand/US dollar exchange rate. The hedging
programme did well to manage our price risk
during the 2023 financial year. We update it
regularly to address changes in our commodity
and currency exposure and will continue to
reduce the hedge cover ratio as our balance sheet
strengthens.
Turnover (Rand billion)
and gross margin (%)
55,1
300
200
60
52,3
272,7
289,7 50
44,4
40
201,9
30
%
400
Rbn
At 30 June 2023, our total debt excluding leases
increased to R124,3 billion from R105,1 billion.
This was largely driven by the weaker rand/US
dollar closing rate (R18,83 compared to R16,28
in FY22) which had an impact of increasing net
debt by R16,2 billion. Our net debt (excluding
leases) at 30 June 2023 was US$3,8 billion
and remained unchanged from FY22, and included
payments in FY23 of the FY22 final dividend and
hedges that expired. Net debt to EBITDA
increased to 1,3 times and gearing increased to
44,7%. Both were negatively impacted by the
significantly weaker rand/US dollar closing rate.
Gearing was also negatively impacted by the full
impairment of our Secunda liquid fuels refinery
cash generating unit (CGU).
20
100
10
0
0
Jun 21
Jun 22
Turnover
Jun 23
Gross margin %
Net debt (US$ billion)
6
5,2
5
4
US$bn
Adjusted earnings before interest, tax, depreciation
and amortisation (adjusted EBITDA) decreased
by 8% to R66,3 billion. Cash fixed costs of
R68,8 billion were R6,7 billion (11%) up on the prior
year. R6,3 billion (10%) of the increase in cost
relates to inflation and exchange rates. Excluding
inflation and exchange rates, costs increased by
R0,4 billion (1%), led by higher labour cost, study
costs and maintenance costs. The higher costs
were offset by savings from Sasol 2.0 initiatives
and the impact of business disposals in FY22.
3,8
3,8
Jun 22
Jun 23
3
2
1
0
Jun 21
Net debt to shareholders’ equity (%)
70
Maintaining the flexibility of the balance sheet to navigate
the evolving global financial landscape remained a key focus.
60
During FY23, we worked to strengthen our balance sheet by
issuing a convertible bond of US$750 million in November 2022
and executing several debt refinancing transactions to address
our 2024 maturities.
40
61,5
41,8
44,7
Jun 22
Jun 23
%
50
30
20
10
0
Jun 21
SASOL INTEGRATED REPORT 2023
27