Sasol Integrated Report 2024 - Book - Page 22
INTRODUCTION
ABOUT SASOL
STRATEGIC OVERVIEW
BUSINESSES
ESG
DATA AND ASSURANCE / ADMINISTRATION
REMUNERATION REPORT
PRESIDENT AND CHIEF EXECUTIVE OFFICER’S STATEMENT continued
OPERATIONAL AND SALIENT FEATURES
Amid significant challenges, we made some notable strides in the second half of the financial year.
However, despite these improvements, our performance was impacted by operational setbacks and
a demanding macroeconomic environment. Our underlying operating performance was, however,
mostly in line with the revised market guidance.
We made significant strides in Mining, Gas, and Secunda Operations (SO).
Our full potential programme in Mining is nearing completion. The benefits of this is reflected in
the productivity gains we delivered. While productivity targets in certain sections have been met, and
even exceeded, we have identified opportunities to further improve those sections that are lagging.
WE REGARD SAFETY AS A CRUCIAL LEADERSHIP MATTER
In Mozambique, a significant milestone was achieved with early gas flow from the Production Sharing
Agreement (PSA) Initial Gas Facility.
Early decisive actions
Safety, the foundation of our future
Drawing on two decades of Sasol experience,
I have already implemented a few decisive actions
in my first five months as CEO, to bring about
meaningful change.
Having spent many years in operations, working
closely with our frontline team members and
service providers, I have first-hand insight into
how deeply family and community means to them.
In April 2024, I commenced streamlining Sasol’s
operating model. This entailed revising the
portfolios of the Group Executive Committee,
and senior leadership layers.
For more detail refer to page 10.
These changes were designed to enhance
accountability, foster collaboration and to help
create a clearer focus between the business
of today, and the business of tomorrow.
This allows us to eliminate duplication and
improve transparency and accountability,
enabling us to effectively navigate both shortterm challenges and future opportunities.
Regarding strategy, we established a framework
to guide our priorities and ambitions, centred on
two pillars: strengthen and grow; and transform.
For more detail refer to page 24.
This framework is driving us to urgently reinforce
our foundation, elevate performance and move
towards full potential.
Furthermore, recognising the pressing need to
improve our short-term performance,
I implemented focus areas to unlock
opportunities. This enabled us to deliver a strong
fourth quarter performance, which helped improve
our results, overall, for financial year 2024.
This deepened my commitment to ensuring that
everyone of us must return home safely to our
loved ones each day. The fact that we are not
achieving this, weighs heavily on my heart.
The loss of five colleagues during this reporting
period is a devastating reminder that we are far
from achieving our goal of Zero Harm.
At Sasol, we regard safety as a crucial leadership
matter. We are actively increasing the presence
of leaders in the field, to confirm that systems
are working as designed and that leaders
are engaging and supporting their teams to
remove barriers to a safe working environment.
To this end, I have mandated all people on site –
regardless of rank or position – to speak up
and stop work if they see any unsafe practices
or safety risks.
We are redoubling our safety efforts to ensure
strict adherence to operational rigour, with
multiple interventions already in progress.
With the full support of Team Sasol, these
actions will further embed a culture where
safety is at the forefront of everything we do.
We also continued with our improvement interventions at SO focusing on equipment availability and
operational stability. As a result, we saw an increase in volumes.
Internationally, we continue to manage the utilisation rates of our assets in response to weak
chemicals demand. We are also focusing on increasing volumes of our high-margin products.
As Team Sasol, we understand we must be consistent in our delivery to ensure that we meet our
targets. Despite improved business performance in the second half, cash generation and profitability
declined significantly compared to financial year 2023.
Cash fixed costs (CFC) rose by just 1%, well below inflation, and, excluding inflation and exchange
rate impacts, CFC decreased by 5%, reflecting our focused cost reduction efforts.
Adjusted EBITDA and cash generated by operations fell by 9% and 19%, respectively.
However, the second half saw substantial improvements over the first half.
We reported a loss before interest and tax, driven largely by non-cash adjustments,
including a R46 billion net impairment in the Chemicals America segment, reflecting a weaker
outlook for the value chain and persistent oversupply.
While these impairments are non-cash, management is committed to recovering value
through initiatives to enhance the performance of our International Chemicals business
and broader portfolio.
Capital spend decreased by 2% to R30 billion, below market guidance, due to ongoing capital
portfolio optimisation and the postponement of low-risk projects. Importantly, this reduction
did not compromise the maintenance and reliability of our assets.
Free cash flow for the year dropped by 60%, but we saw a significant turnaround from a negative
R6 billion in the first half to a positive R8 billion by year-end, demonstrating the resilience
of Team Sasol. I am confident we can further improve performance in the new financial year.
Given our performance, the Board made the difficult decision to forego paying a final dividend,
resulting in a full-year dividend of R2 per share. Furthermore, the disconnect between headline
earnings and actual cash flow, coupled with elevated leverage, has prompted a revision in
our dividend policy. Going forward, dividends will be based on free cash flow before discretionary
capital and dividends paid.
For more detail refer to Chief Financial Officer’s Statement page 49.
SASOL INTEGRATED REPORT 2024
20
