In This Article:
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Adjusted EBITDA: ZAR24 billion, 15% lower than the previous year.
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Free Cash Flow: Improved by more than 80%, despite being slightly below expectations.
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Gross Margin: Declined by 11%, with a stable percentage at 45%.
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Cash Fixed Costs: Decreased by 1% due to ongoing transformation initiatives.
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Net Loss from Remeasurement Items: Approximately ZAR6 billion, mainly due to impairments.
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Net Debt: USD4.3 billion as of December 31, 2024.
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Dividend Policy: Interim dividend passed due to net debt exceeding USD4 billion.
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International Chemicals EBITDA Contribution: Increased from 6% to 13% of group adjusted EBITDA.
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Southern Africa Energy and Chemicals: Mining segment earnings improved; Fuels earnings declined by 61%.
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Gas Business Earnings: Increased by 71% due to higher gas prices and volumes.
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Chemicals America Earnings: Increased by 77% supported by improved US ethylene margins.
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Chemicals Eurasia Earnings: More than 100% increase, though margins remain low.
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Capital Expenditure: Reduced by 6% in the first half of the year.
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Hedging Program: 100% completed for FY '25 and over 85% for FY '26.
Release Date: February 24, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Sasol Ltd (NYSE:SSL) has remained fatality-free since August 2024, indicating a strong focus on safety.
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The company has improved free cash flow by more than 80%, despite macroeconomic headwinds.
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Sasol Ltd (NYSE:SSL) has successfully completed repairs at the Natref refinery, bringing it back online.
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The company is committed to reducing its carbon intensity by 30% by 2030, with a refined emission reduction roadmap.
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Sasol Ltd (NYSE:SSL) has made significant progress in its International Chemicals segment, with an 80% increase in adjusted EBITDA.
Negative Points
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Adjusted EBITDA for the period was 15% lower than the previous year due to macroeconomic challenges.
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The company faced elevated safety incidents in the first half of the financial year, particularly during the Secunda shutdown.
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Sasol Ltd (NYSE:SSL) has decided to mothball three underperforming assets in Germany, Italy, and the US, indicating operational challenges.
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The company has passed the interim dividend due to a free cash flow deficit and net debt exceeding the dividend trigger.
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Sasol Ltd (NYSE:SSL) continues to face coal quality challenges, impacting gasifier availability at Secunda operations.
Q & A Highlights
Q: How much would the destoning project add in terms of coal volumes, revenue uplift, cost savings, or EBITDA uplift? Were other options considered to improve mining volumes? A: The destoning project aims to improve coal quality, not necessarily increase volumes. It will reduce stone content in coal, enhancing gasifier efficiency. This project is expected to cost under ZAR1 billion and will be operational in the first half of FY '26. Other options, like establishing a new mine, are considered but take time. (Simon Baloyi, CEO; Victor Bester, EVP of Operations and Projects)