Sasol Limited (SSL)
F2Q13 Earnings Call
March 11, 2013 9:00 am ET
David Edward Constable – Chief Executive Officer and Executive Director
Kandimathie Christine Ramon – Chief Financial Officer and Executive Director
Giullean Johann Strauss – Senior Group Executive-New Business Development
Andre Marinus De Ruyter – Senior Group Executive-Global Chemicals and North American Operations
Bernard Ekhard Klingenberg – Group Executive-South African Energy
Jarrett Geldenhuys – Deutsche Bank
Nishal Ramloutan – UBS South Africa Ltd.
Alex R. Comer – JPMorgan Securities Plc
Nic Dinham – Cadiz Securities
Previous Statements by SSL
» Sasol's CEO Discusses F4Q12 (Year-End) Results - Earnings Call Transcript
» Sasol's CEO Discusses F2Q12 Results - Earnings Call Transcript
» Sasol Limited CEO Discusses F4Q 2011 Results - Earnings Call Transcript
» Sasol Ltd (Qtr End 6/30/07) Earnings Call Transcripts
David Edward Constable
Thanks very much, Christine. Good morning, good afternoon and good evening everyone thanks for joining us on the conference call today. Joining on the call from Sasol are Christine Ramon our CFO, Lean Strauss, our Senior Group Executive for International Energy, Technology and New Businesses; Andre De Ruyter, Senior Group Executive for Global Chemicals and North American Operations. Bernard Klingenberg, Group Executive for South African Energy; Nolitha Fakude, Executive Director Sustainable and Transformation; and Riaan Rademan is the Group Executive, Mining and Business Enablement.
Today we announced the solid and stable financial performance given our South African and international contacts this is no small task, our results are testament to our ability to continue to be resilient in challenging times. Notwithstanding global economic uncertainties subsequent stability and commodity market volatility we continue to deliver for our shareholders well across our growth projects in a measured and responsible fashion.
Turning to Slide 4 of the presentation, which is in front of you let me start with an overview of why you are here today. So I’ll begin by providing with some context to support our resilient we are now within the challenging global environment at the past four and half years. We'll then spend some time highlighting the key milestones we've achieved during the first half of the 2013 financial year.
Christine will go into more detail on the strong financial and operational performance of our businesses and then some of the advancements we've made on our growth projects in particular. I'll highlight how we are approaching investment decisions on the strategic projects in the U.S.
We'll wrap up the presentation by summarizing by Sasol remains an extremely compelling investment position and open it up to those on the call to ask us any questions you may have.
Let's turn to Slide 5. As said, 2009 three key factors have been influencing the nature and expected the investment decisions taking by corporate worldwide. Number one, persisting global economic crisis; two, international subsequent stability; and number three, commodity market volatility. These factors have also had a chilling effect on economic growth, impacting, in large part, both the private and public sectors.
Despite significant global challenges, Sasol remains resilient, as can be seen from the attributable earnings graph shown here. The graph reflects our earnings for the past 13 years. Over this period, we remained a strong performer with our earnings trending favorably upward. In 2008, we had one of our best earnings years followed by a sharp dip in 2009 at the start of the global recession. Notwithstanding this setback, we bounced back in 2010 and have continued our upward trajectory.
And slide 6, self explanatory, I will not talk to the slide. Next slide 7, reflects the positive contributions. We continue to make on a number of fields in South Africa and abroad. I will not talk to the specifics listed here. But let me just briefly talk to one. As we know all too well, South Africa has been rocked by social and labour unrest. The events of the past eight months have not only impacted business operations, primarily in the mining, transport and agricultural sectors, but also the country as a whole.
At Sasol, we have been proactively addressing many of the socio-economic challenges faced by our workforce, our unions and the communities in which we live and work. Our efforts in this area began well before the Marikana tragedy and long insights on operations.
We’ll finally highlight some of our contribution, depiction, skills enhancement, community upliftment and enterprise development in the first half of FY13. And finally, these proactive efforts have effectively checked as part of the strategy thereby allowing us to significantly run our operations reliably.
Moving on to slide 8, key milestones in South Africa in the first half. Let me just talk about the last point in the slide, specifically our electricity generation at Sasolburg, our R1.9 billion gas-fired power generation plant that’s producing 140 megawatts of power. The plant was commissioned last December.
Traditionally, natural gas-powered plants are quicker to build taking between 20 to 30 months. Our Sasolburg Plant took only 16 months from starting construction to full commissioning, a resounding success, which was made possible by the collective efforts of so many, including the Department of Energy, our contractors and our New Energy team.
As a result of this and other projects, we are now able to self-generate up to 67% of our electricity requirements in South Africa and as a result, we’ve reduced our carbon footprint dramatically. Natural gas plants are more efficient, they require less fuel input and the same amount of electricity generated and they are less carbon intensive. Equally important, our self-generating power supply strategy makes us much less vulnerable to rising energy costs.
Next, moving just down to Slide 9 and what we delivered in terms of our global projects in the first half of this financial year. You remember on December 3, which is the same day of our last conference call at our facility in Lake Charles, Louisiana, we announced that we’ll proceed with the front-end engineering and design phases for our strategic projects in the United States, a world-scale ethane cracker and derivatives plant and an integrated gas-to-liquids and chemicals facility.