Sasol Limited Integrated Report 2021 - Book - Page 49
Chemicals Business at a glance (CONTINUED)
• Sound safety performance with no fatalities or
life-altering injuries during the year.
• Strong FY21 financial performance with adjusted
EBITDA almost 70% higher than previous year.
• Last unit at the LCCP declared beneficial operation
in November 2020, and units continue
• Significant progress in delivering on our previously
announced asset divestiture programme.
• Completed organisational redesign as part of
Sasol 2.0 transformation programme.
• Further developed our GHG reduction roadmap.
• Displayed resilience in managing the COVID-19
pandemic and innovation in using our unique
chemistry to develop solutions for a better world.
In a year of significant change and challenges, we continued
our relentless focus on zero harm. There were no fatalities
or life-altering injuries in the year. Our recordable case rate
(RCR) remained the same as previous year at 0,29 while the
fires, explosions and releases severity rate (FER-SR) increased
from 9,9 to 10,8. On the positive side, our transporter
indicator of performance (TiOP) improved from 1,56 to 0,72.
We prioritised employee wellbeing with an attitude of care
and empathy particularly evident from leadership during our
Sasol 2.0 transformation programme.
Delivery on asset divestment
The Chemicals Business delivered a strong financial performance in FY21 with adjusted EBITDA almost 70% higher than the
previous year. This was despite adverse weather events in both the United States and South Africa impacting production and the
continued impact of the COVID-19 pandemic. The average sales basket price (US$/t) was 17% higher compared to the prior year
while sales volumes were only 3% lower. Strict cost control and disciplined capital management were maintained, while the asset
divestiture programme was further advanced with a number of divestments completed across all the regional segments.
Sales volumes from our South African-based assets were
1% higher compared to the prior year despite the ongoing
COVID-19 global pandemic and a power outage at the
Sasolburg site caused by a severe storm at the end of
The average sales basket price (US$/t) for the financial
year was 14% higher compared to the prior year due to
a combination of improved demand, higher oil prices and
reduced market supply from the weather-related events in
the United States and global supply chain challenges due to
the continued COVID-19 pandemic.
EBIT for the year of R7 billion increased by more than 100%
compared to prior year largely due to the aforementioned
increase in the US$/ton basket sales price, sales volumes
and a reduction of impairments recognised from FY20.
We recognised a total of R9 billion of impairments related to
both our Wax (R7,9 billion) and Chlor-Vinyls (R1,1 billion)
cash-generating units (CGU) in FY21 largely due to higher
costs associated with gas feedstocks in future years, lower
planned sales volumes, stronger rand/US dollar exchange rate
and planned divestment of the sodium cyanide business.
Sales volumes from our America-based assets for the year
ended 30 June 2021 were 16% lower than the prior year,
impacted by two hurricanes, the arctic winter storm and
divestment of the US Base Chemical assets.
We recognised a net reversal of impairments (R4,5 billion)
in FY21 largely associated with the Ethylene Oxide/Ethylene
Glycol (EO/EG) unit following a reassessment of the CGU
Sales volumes from our Eurasian-based assets for the
financial year were 4% higher than the prior year, despite the
divestment of Sasol’s share in the Sasol Wilmar Joint Operation
in the 2020 financial year. The increase in sales volumes
continued to be driven by improved market demand, mainly
for our Essential Care Chemicals and Performance Solutions
products, especially surfactants and wax, whereas demand
for other product applications (notably Advanced Materials)
continues to be negatively affected by the COVID-19 pandemic
and associated restrictions in certain markets.
The average sales basket price (US$/ton) increased by 13%
compared to the prior year.
EBIT for the year of R4,7 billion increased by more than
100% compared to the prior year largely due to the
aforementioned increase in both the basket sales price,
sales volumes and absence of impairments (R2,4 billion)
recognised in FY20.
Operating segment contribution to
adjusted FY21 EBITDA
The average sales basket price (US$/ton) for the financial year
was 24% higher compared to the prior year.
EBIT for the year of R8,1 billion increased by more than
100% compared to the prior year largely due to the aforementioned higher prices, a reduction of impairments
and gains from the aforementioned asset divestitures.
We made significant progress in delivering on our previously
announced asset divestiture programme with approximately
R36,6 billion of transactions completed during the year.
The largest divestments occurred in America with the
divestment of a 50% interest in Sasol’s Base Chemicals
Business in Lake Charles to LyondellBasell for US$2 billion on
1 December 2020. In addition, we divested our 50% interest
in the Gemini HDPE joint venture to INEOS for US$0,4 billion
on 31 December 2020. Smaller divestments also occurred
in Eurasia associated with the sale of our share of the ARG
ethylene pipeline and in Africa associated with a further
sell-down of our % shareholding in Enaex Africa to a BroadBased Black Economic Empowerment (B-BBEE) partner.
Lastly, we announced in July 2021 an agreement to sell our
sodium cyanide business for a consideration of R1,5 billion.
The transaction is expected to close in the first half of CY22
subject to the fulfillment of various conditions precedent.
Global momentum behind the energy transition is growing,
impacting the chemicals industry but also creating
opportunities. The urgency to respond to climate change is
being felt throughout our value chain and collaboration with
our suppliers and customers is critical. We aim to reduce our
absolute scope 1 and 2 emissions by 30%# by 2030 in all our
regional operating segments with an ambition to be Net Zero
We are advancing the development of renewable and circular
drop-in feedstocks in collaboration with our customers and
supply partners, which will support reduction of scope 3 GHG
emissions over time.
Renewable electricity plays a critical role in our GHG reduction
plans. With increasing electrification of energy markets
comes the need for increasingly demanding chemistry
in battery, automotive and power markets. Our growth
and innovation efforts are aligned with these powerful
megatrends and focused on developing solutions for our
customers using our unique chemistry.
Off 2017 base.
or more detail refer to our Climate Change Report
available on our website, www.sasol.com
Sasol Integrated Report 2021