- One of the worlds biggest corporate air polluters, Sasol, has announced that financial results for the year ended 30 June 2024 were negatively impacted by challenging market conditions, with continued pressure from constrained margins and depressed chemicals prices resulting in turnover of R275,1 billion being 5% lower than the prior year.
- A loss before interest and tax (LBIT) of R27,3 billion was incurred compared to earnings before interest and tax (EBIT) of R21,5 billion in the prior year.
- The company said the decline was mainly due to increased asset impairments, lower earnings before interest, tax, depreciation and amortisation, translation losses and reduced derivative gains.
An impairment loss of R56,7 billion net of tax (R74,9 billion gross) was recorded, mainly relating to the following impairments:
- Chemicals America Ethane value chain (Alcohols, Alumina, Ethylene Oxide, Ethylene Glycol and associated shared assets) cash generating unit (CGU) of R45,5 billion net of tax (R58,9 billion gross). The impairments are primarily driven by external conditions, including prolonged softer market pricing and outlook;
- A total of R3,9 billion net of tax (R5,3 billion gross) relating to the Chemicals Africa Polyethylene, Chlor-Alkali & Polyvinyl Chloride, and South African Wax value chain CGUs, of which R0,9 billion net of tax (R1,2 billion gross) was impaired at 31 December 2023. The further impairment at 30 June 2024 relates to the Polyethylene CGU as a result of oversupply and reduced demand in the global market. The South African Wax value chain CGU remains fully impaired; and
- Secunda liquid fuels refinery CGU of R5,7 billion net of tax (R7,8 billion gross), which remains fully impaired at 30 June 2024.
The prior year included impairments of R33,7 billion (gross) mainly due to the Secunda liquid fuels refinery CGU (R35,3 billion), South African Wax value chain CGU (R0,9 billion), China Essential Care Chemicals CGU (R0,9 billion), offset by a reversal of the US Tetramerisation CGU impairment (R3,6 billion).
The actual net debt for 2024 of USD4,1 billion exceeds the net debt trigger in the new dividend policy and results in no final dividend being declared for 2024, resulting in a full year dividend of R2 per share.
Last week Sasol announced the appointment of Walt Bruns as Chief Financial Officer (CFO) and Executive Director of Sasol Limited, effective 1 September 2024. Walt, a certified chartered accountant in South Africa, is currently CFO of Sasol Southern Africa including Energy and Chemicals.
Sasol’s Secunda plant is the worlds biggest emitter of greenhouse gases. The emissions from the plant exceed the individual totals of more than 100 countries. Sasol recently reported a drop in fuel production and ‘operational instability’ at their Secunda plant. Read more
Sasol has been accused of failing to transition from its dependency on fossil fuel power generation for the last decade. Civil rights groups, JustShare and the Centre for Environmental Rights, have expressed concern that Sasol has not shown any real signs of decreasing its emissions. Sasol is listed as one of 57 big companies that produced 80% of the world’s CO2emissions from 2016 to 2022, according to a new report from the Carbon Majors database.
Specifically, Sasol emits some 167 kilotonnes of sulphur dioxide (SO2) from its industrial processes every year. It emits several other dangerous pollutants and is a major contributor to the toxic air quality on the Mpumalanga Highveld, which not only violates the constitutional right to a healthy environment, it also causes premature deaths, prolonged ill health and lung desease. While the Sasol board has sung his praises, this is the real legacy that Stephen Westwell will leave the people of South Africa.
Author: Bryan Groenendaal
