Sasol Delivers Solid Operational Performance

PR59750

JOHANNESBURG, Mar. 9 /PRN-KYODO JBN/ --

Salient features

- Strong group-wide operational performance

- 3% increase in liquid fuels sales volumes for Energy business in Southern

Africa

- Performance Chemicals and Base Chemicals sales volumes up 5% and 1%

respectively

- Normalised cash fixed costs 0,7% below inflation

- Headline earnings per share up by 6% to R32,00

- Business Performance Enhancement Programme annual cost savings target

increased to at least R4,3 billion

- Decisive management action taken in response to lower international oil

prices

- Safety Recordable Case Rate (RCR) excluding illnesses improved to 0,32

- Lake Charles Chemicals Project making good progress

Maintaining momentum

President and Chief Executive Officer, David E. Constable says:

"The changes made to our business since 2011, have resulted in a more effective

and cost-conscious organisation. Through the various improvements that have

been introduced, we are not only more resilient as a company, but far better

equipped to maintain momentum and respond decisively to an evolving global

landscape.

Overall, we continued to deliver strong operational and cost performance

despite the volatile macro-economic environment. With oil prices moving

dramatically lower over the last six months, the management team has formulated

a comprehensive Response Plan to conserve cash and further refine our

organisational structures and near-term strategies.

The benefits of the detailed work we are doing now will ensure that Sasol

emerges from the current challenging environment as an even leaner and more

focused business."

Interim financial results overview*

Earnings attributable to shareholders for the six months ended 31 December 2014

increased by 54% to R19,5 billion from R12,7 billion in the prior period.

Headline earnings per share increased by 6% to R32,00 and earnings per share

increased by 53% to R32,04 compared to the prior period.

However, excluding the impact of remeasurement items, net once-off charges,

movements in our share-based payment expense and lower unrealised profit in

inventory, earnings attributable to shareholders decreased by 23% from the

prior period.

Profit from operations of R30,0 billion increased by 39% compared to the prior

period. This achievement was due to an overall strong operational performance

from our Regional Operating Hubs (ROHs) coupled with increased sales volumes

and improved margins in our Performance Chemicals and Base Chemicals Strategic

Business Units. The group's profitability was further enhanced by a 9% weaker

average rand/US dollar exchange rate (R10,99/US$ for the six months ended 31

December 2014 compared with R10,08/US$ in the prior period). This benefit was

partially offset by a 19% decline in average Brent crude oil prices (average

dated Brent was US$89,00/barrel for the six months ended 31 December 2014

compared with US$109,83/barrel in the prior period).

Over the period, we maintained a strong operational performance across our

ROHs. In tandem, our Energy business in Southern Africa increased its liquid

fuels sales volumes by 3% compared to the prior period. Furthermore, our

Chemicals businesses delivered an exceptional performance, having consistently

reported increased sales volumes over the past two years. Normalising for the

impact of the sale of our Solvents Germany and Sasol Polymer Middle East (SPME)

businesses and due to focused marketing and sales initiatives, sales volumes

for Performance Chemicals and Base Chemicals increased by 5% and 1%, from the

prior period.

Our ORYX GTL plant sustained a solid performance, with an average utilisation

rate of 91% for the period, despite an earlier than planned shutdown during

December 2014.

Normalised cash fixed costs increased by only 6,1%, 0,7% below the South

African producers' price index (SA PPI) of 6,8% for the period. This was

achieved despite a challenging South African cost environment in respect of

labour, maintenance and electricity charges. A key focus area for the

management team since 2013 has been delivering on our company-wide Business

Performance Enhancement Programme, where we have made significant progress in

reducing our cost base sustainably.

Cash flow generated from operations increased by 21% to R34,0 billion compared

with R28,1 billion in the prior period. This includes a decrease in working

capital of R1,8 billion in the current period, due to lower commodity prices.

Our net cash position improved by 29% from R38,0 billion in June 2014 to R48,9

billion as at 31 December 2014. Capital expenditure over the period amounted to

R22,1 billion, which is in line with our expectations.

As previously announced, our revised dividend policy is a dividend cover range

which will be based on headline earnings per share. The interim dividend cover

was 4,6 times at 31 December 2014 (31 December 2013: 3,8 times). Taking into

account the current volatile macro-economic environment, capital investment

plans, our cash conservation initiative, the current strength of our financial

position, and the dividend cover range, the Sasol Limited board of directors

has declared an interim dividend of R7,00 per share (12,5% lower compared to

the prior period).

* All comparisons refer to the prior period as the six months ended 31 December

2013. Except for earnings attributable to shareholders, all numbers are quoted

on a pre-tax basis.

Business Performance Enhancement Programme delivering results

As part of our Business Performance Enhancement Programme, the process of

implementing organisational structures and employee placements to align with

our updated operating model will be concluded by the end of June 2015. As at 31

December 2014, nearly 1 500 voluntary separations and early retirements were

approved by the company.

We still expect cost savings of R4,0 billion by financial year 2016 off a 2013

cost base. We have identified further savings opportunities and now forecast an

exit run rate of at least R4,3 billion by the end of financial year 2016. Cost

trends are still forecast to track SA PPI from financial year 2017.

At 31 December 2014, the programme realised actual sustainable benefits of R991

million. For the end of the financial year we expect sustainable savings to

increase to approximately R1,5 billion.

As part of our Response Plan actions, we plan to deliver further cash cost

sustainable savings of R1 billion annually. These savings will be achieved

through additional organisational structural refinements, a 30-month freezing

of between 500 and 1 000 vacancies, and focused supply chain cost base

reduction initiatives.

Response to lower international oil prices

In response to a lower-for-longer oil price environment, we announced our

Response Plan on 28 January 2015. We have set a 30-month cash conservation

target range of between R30 billion to R50 billion, using 31 December 2014 as

the baseline. This cash conservation target range supplements our current

Business Performance Enhancement Programme sustainable cost savings target of

at least R4,3 billion per year, from financial year 2017.

Our Response Plan target of R30 billion to R50 billion will be realised from

the following key areas:

- capital portfolio phasing and reductions - target of R13 billion to R22

billion;

- capital structuring - target of R8 billion to R12 billion;

- further cash cost reductions - target of R4 billion to R7 billion of which R1

billion per annum will be considered sustainable at the end of the 30-month

period; and

- working capital and margin improvements - target of R5 billion to R9 billion.

As previously announced, decisive measures have already been agreed to and key

decisions have been taken to conserve cash, including the delay of our

gas-to-liquids (GTL) plant in the US, the change to our dividend policy as well

as the further optimisation of our organisational structures.

Profit outlook (*)- strong production performance and cost reductions to

continue

The global economic environment remains volatile and uncertain. We expect oil

prices to remain low for the rest of the 2015 calendar year. We also expect the

rand exchange rate to be impacted by quantitative easing in the Eurozone,

uncertainties relating to the interest rate normalisation by key central banks

and infrastructure constraints in South Africa. Both oil price and rand

exchange rate developments are outside of our influence, and therefore our

focus remains firmly on factors within our control, which include volume

growth, margin improvement and cost optimisation.

Oil and other commodity price risk hedging are evaluated on an ongoing basis.

The market is constantly monitored for risk management opportunities, taking

cognisance of integration benefits and the strength of Sasol's balance sheet.

We expect an overall strong production performance for the 2015 financial year,

with:

- Liquid fuels product volumes for the Energy SBU in Southern Africa to be

approximately 59 million barrels;

- The average utilisation rate at ORYX GTL in Qatar to be above 90% of

nameplate capacity;

- Base Chemicals normalised sales volumes to be slightly higher than the

previous financial year with margins under pressure due to lower international

oil prices;

- Performance Chemicals sales volumes to outperform the previous financial year

on the back of increased market demand;

- Average Brent crude oil prices to be at least 30% lower during the second

half of the financial year compared to the first half;

- Normalised cash fixed costs to follow SA PPI;

- Capital expenditure of R45 billion for 2015, R65 billion in 2016 and R60

billion in 2017 as we progress with the execution of our growth plan and

strategy;

- Our balance sheet gearing up to a level of between 2% and 7% at year-end; and

- The Response Plan cash flow contribution from all streams to range between R6

billion and R10 billion.

(*) The financial information contained in this profit outlook is the

responsibility of the directors and in accordance with standard practice, it is

noted that this information has not been reviewed and reported on by the

company's auditors.

Declaration of cash dividend number 71

An interim gross cash dividend of South African 700,00 cents per ordinary share

(31 December 2013 - 800,00 cents per ordinary share) has been declared for the

six months ended 31 December 2014. The interim cash dividend is payable on the

ordinary shares and the Sasol BEE ordinary shares. The dividend has been

declared out of retained earnings (income reserves). The South African dividend

withholding tax rate is 15% and no credits in terms of secondary tax on

companies have been utilised. At the declaration date, there are 650 879 016

Sasol ordinary, 25 547 081 Sasol preferred ordinary and 2 838 565 Sasol BEE

ordinary shares in issue. The net dividend amount payable to shareholders, who

are not exempt from the dividend withholding tax, is 595,00 cents per share,

while the dividend amount payable to shareholders who are exempt from dividend

withholding tax is 700,00 cents per share.

The salient dates for holders of ordinary shares and Sasol BEE ordinary shares

are:

Declaration date: Monday, 9 March 2015

Last day for trading to qualify for and participate in the final dividend (cum

dividend): Wednesday, 1 April 2015

Trading ex dividend commences: Thursday, 2 April 2015

Record date: Friday, 10 April 2015

Dividend payment date: Monday, 13 April 2015

The salient dates for holders of our American Depository Receipts are [1]:

Ex dividend on New York Stock Exchange (NYSE): Wednesday, 8 April 2015

Record date: Friday, 10 April 2015

Approximate date of currency conversion: Tuesday, 14 April 2015

Approximate dividend payment date: Thursday, 23 April 2015

1. All dates are approximate as the NYSE sets the record date after receipt of

the dividend declaration.

On Monday, 13 April 2015, dividends due to certificated shareholders on the

South African registry will either be electronically transferred to

shareholders' bank accounts or, in the absence of suitable mandates, dividend

cheques will be posted to such shareholders. Shareholders who hold

dematerialised shares will have their accounts held by their CSDP or broker

credited on Monday, 13 April 2015.

Share certificates may not be dematerialised or re-materialised between

Thursday, 2 April 2015 and Friday, 10 April 2015, both days inclusive.

Conference call webcast available on Sasol's website

David Constable, President and Chief Executive Officer and Paul Victor, Group

Financial Controller will host an analyst conference call and webcast at 15h00

(South Africa) / 13h00 (United Kingdom) / 08h00 (US EDT) to discuss the

results. The conference call webcast can be accessed from Sasol's website

http://www.sasol.com.

Detailed supplementary information regarding the interim financial results,

such as the conference call presentation, the full earnings release and the

analyst book, is available on the Investor Centre on http://www.sasol.com.

Forward-looking statements: Sasol may, in this document, make certain

statements that are not historical facts and relate to analyses and other

information which are based on forecasts of future results and estimates of

amounts not yet determinable. These statements may also relate to our future

prospects, developments and business strategies. Examples of such

forward-looking statements include, but are not limited to, statements

regarding exchange rate fluctuations, volume growth, increases in market share,

total shareholder return and cost reductions. Words such as "believe",

"anticipate", "expect", "intend", "seek", "will", "plan", "could", "may",

"endeavour" and "project" and similar expressions are intended to identify such

forward-looking statements, but are not the exclusive means of identifying such

statements. By their very nature, forward-looking statements involve inherent

risks and uncertainties, both general and specific, and there are risks that

the predictions, forecasts, projections and other forward-looking statements

will not be achieved. If one or more of these risks materialise, or should

underlying assumptions prove incorrect, our actual results may differ

materially from those anticipated. You should understand that a number of

important factors could cause actual results to differ materially from the

plans, objectives, expectations, estimates and intentions expressed in such

forward-looking statements. These factors are discussed more fully in our most

recent annual report under the Securities Exchange Act of 1934 on Form 20-F

filed on 29 September 2014 and in other filings with the United States

Securities and Exchange Commission. The list of factors discussed therein is

not exhaustive; when relying on forward-looking statements to make investment

decisions, you should carefully consider both these factors and other

uncertainties and events. Forward-looking statements apply only as of the date

on which they are made, and we do not undertake any obligation to update or

revise any of them, whether as a result of new information, future events or

otherwise.

About Sasol:

Sasol is an international integrated energy and chemicals company that

leverages the talent and expertise of our more than 32 400 people working in 37

countries. We develop and commercialise technologies, and build and operate

world-scale facilities to produce a range of high-value product streams,

including liquid fuels, chemicals and low-carbon electricity.

For all media related queries, please contact:

Alex Anderson, Head of Group Media Relations

Telephone +27(11)441-3295

alex.anderson@sasol.com

Source: Sasol Limited