Sasol Limited Q4 FY2023 earnings call

Highlights include facing macro challenges with demand, pricing, inflation, and South African state-owned enterprise impacts. Safety performance had positive trends but also tragic fatalities. Progress in renewable energy procurement, Mozambique gas drilling, and sustainable aviation fuel joint venture. Sasol 2.0 transformation program realized over ZAR 7 billion in net sustainable annual cash fixed cost savings and ZAR 6.4 billion gross margin improvements. Updates on mining productivity, Secunda operations, Mozambique gas projects, and sustainability road map.

The Energy business contributed 56% of total EBITDA generation. Mining saw a 16% decline in adjusted EBITDA. Gas business had a 3% increase in adjusted EBITDA. Fuel segment had a 5% increase in adjusted EBITDA. Chemicals Africa saw a 10% decrease in adjusted EBITDA. Chemicals America had a 96% decrease. Chemicals Eurasia had a 74% decrease.

Mining productivity expected to step up to between 975 to 1,100 tonnes per continuous miner per shift. Gas segment volume guidance increased to 113 million to 119 billion standard cubic feet. Chemicals Africa sales volumes expected 0% to 5% higher. Chemicals America sales volumes expected 0% to 5% higher. Chemical Eurasia sales volumes expected 5% lower to 5% higher. Capital management with ZAR 33 million to ZAR 34 billion forecast for financial year '24.

Global economic volatility, regulatory uncertainty in South Africa, environmental compliance challenges, renewable energy grid allocation issues, load shedding, and infrastructure constraints like poor rail and port logistics.

Q: How would you evaluate the overall impact of Eskom and Transnet constraints for this fiscal year?

A: Fleetwood Grobler mentioned active engagements with Transnet and Portnet, collaboration efforts, and positive developments though challenges remain.

Q: What should be the mining productivity once the full rollout is done?

A: Riaan Rademan stated aim to target a run rate of 1,230 tonnes per continuous miner per shift for Secunda collieries by July onwards Q: Is LNG an option for Sasol?

A: Hanré Rossouw said LNG is not economic at current prices, so Sasol will prioritize own gas supply from existing assets or near-field acreage Q: What is the potential impact of the impairment on depreciation?

A: Hanré Rossouw said the immediate impact for financial year '24 would be about ZAR 1.2 billion to ZAR 1.3 billion lower depreciation, with useful life remaining at 2030 spreading out roughly about a ZAR 1 billion per year ongoing