Sasol Ltd. (SSL)
CFO Newsletter Conference Transcript
June 10, 2013 9:00 AM ET
David Constable - Chief Executive Officer
Christine Ramon - Chief Financial Officer
Andre de Ruyter - Senior Group Executive, Global Chemicals and North American Operations
Lean Strauss - Senior Group Executive, International Energy, New Business Development and Technology
Bernard Klingenberg - Group Executive, Southern African Operations
Caroline Learmonth - ABSA Capital
Gerhard Engelbrecht - Macquarie
Nishal Ramloutan - UBS
Nic Dinham - BNP
Alex Comer - JP Morgan
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I would now like to hand the call over to David Constable. Please go ahead, sir.
Thanks very much, Operator. Good morning, good afternoon and good evening, everyone. And thank you for joining us for today’s conference call. I’m calling in from Washington, D.C. as this week certain members of the group executive and I have meetings with key representatives from the White House Administration, Senate and Congress. The focus of our engagements over the next couple of days is to build alignment and strengthen support for our U.S. growth program.
Joining me on the call from Sasol are Christine Ramon, our Chief Financial Officer, who is in Johannesburg; Andre de Ruyter, our Senior Group Executive for Global Chemicals and North American Operations, who is with me here in D.C.; Lean Strauss, our Senior Group Executive for International Energy, New Business Development and Technology; and Bernard Klingenberg, Group Executive for Southern African Operations, both of whom are with Christine in Johannesburg.
After I have kicked off the call, Christine will take you through our financial and operational highlights to the end of March 2013. We’ll then facilitate any questions you may have.
For us, at Sasol, the first nine months of FY ‘13 was all about focusing both the management team and the organization on the urgent and the important. As much as we are looking to strengthen our Southern African base through our nurture and grow strategy, we are equally focused on expanding internationally, most notably in the U.S.
Given the number of critical projects we must deliver on and to ensure that we do not take our eye off the ball, we’re categorizing our strategic priorities into two distinct groupings. First, our near-term priorities, which the entire organization must drive forward and second, our growth priorities, which include a razor-sharp focus on our group-wide capital projects.
Turning to the first category, the near-term priorities, here we have stepped up our cost optimization drive. As you will recall in January we kicked off a diagnostic study into what is causing the concerning cost creep we are seeing in many of our businesses and enterprise functions.
The first phase of the project which we call Project Phoenix is now complete. At the end of May, the GEC approved the second phase and we are excited about the potential benefits it can deliver to the bottom line.
We are also in the process of overhauling our Group-wide operating model to ensure that we become a more effective, efficient and competitive organization in the coming years. We’ll be able to provide you with more color on Project Phoenix and our operating model work in September after we have closed off our analysis and finalize the path forward.
Next, as we drive to become more competitive and as we look to retain and attract future talent, embedding a high performance culture where our employees are engaged, enabled and accountable is critically important.
Finally and linked to a high performing organization is talent development and succession planning. This includes at the top management level. As we evolve as a company we must have the right people with the right skill sets in the right positions.
Looking at the second category our growth priorities, here we continue to advance in a measured and responsible fashion, as you’ll have seen from our recent decisions to reduce participation in our Uzbekistan GTL joint venture and to divest from our exploration licenses in Papua New Guinea.
With respect to growth priorities, world-class project execution is also critically important. As we discussed at our Investor Strategy Days in April to deliver our capital projects on time and within budget, we are increasing the use of integrated project management teams. This allows us to leverage the expertise, capabilities and experience of external industry specialists across all project disciplines.
Turning back to this past quarter, we had some very positive results across the Group. We continued to achieve important milestones in the areas of safety, operations and on our U.S. Mega Projects.
Under safety, the Group’s recordable case rate for employees and service providers stood at 0.30 at the end of March that’s the lowest level ever recorded in the company’s 63-year history.
Equally important, we continue to maintain a solid operational performance at Synfuels and at our flagship GTL facility in Qatar. Noteworthy, here is that ORYX continues to improve, with an average run rate last month above 106% of design capacity.
And with respect to our U.S. growth program, our integrated project management team is in place and we are working hard to secure environmental permits, which are on the critical path.