Technology for Sustainable Energy
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7571 - AR front (1)p1-21(z7) 10/11/06 1:38 PM Page B technology for sustainable energy annual review and summarised financial information 2006 7571 - AR front (1)p1-21(z7) 10/11/06 1:39 PM Page C vision To be a respected global enterprise, harnessing our talents in applying unique, innovative and competitive technologies to excel in selected markets in the energy and chemicals sectors in Southern Africa and worldwide. cover photograph Inspired by our Reaching New Frontiers slogan and determined to prove to the world that ultra low-emissions diesel from the Sasol Slurry Phase Distillate™ process is a viable fuel,12 adventurers completed a 10 000-kilometre trek across Africa and the Arabian Peninsula. Dubbed the Sasol Chevron GTL Challenge,one of the six vehicles used by the team on this voyage was fuelled entirely by Sasol GTL diesel. This diesel, that burned significantly cleaner than conventional diesel,was made from Mozambican natural gas converted at our Sasolburg plant. The end of their six-week challenge, from Sasolburg to Doha in Qatar,coincided with the inauguration of our joint-venture ORYX gas-to-liquids (GTL) plant in June 2006. 2 The year in review Energy cluster contents 22 Sasol Mining 4 Our group of companies 24 Sasol Synfuels 6 Sasol strategy 26 Sasol Oil 8 Chairman’s statement 30 Sasol Gas 12 Turning natural gas into 32 Sasol Petroleum International low-emissions diesel 34 Sasol Synfuels International 14 Chief executive’s report Main chemical businesses 20 Sasol’s integrated business model 36 Sasol Polymers 22 Operational review 38 Sasol Solvents 50 Global activities Other chemical businesses 52 Experiencing Sasol 40 Sasol Nitro,Sasol Wax and other businesses 54 Sustainable development review Specialist services 68 Board of directors 44 Sasol Technology 70 Summarised financial information 46 Sasol Financing 79 Glossary of terms Discontinued operations ibc Contact information 48 Sasol Olefins & Surfactants values Sasol's global business principles and conduct are founded on, and inspired by, six shared values: customer focus winning with people safety excellence in all we do continuous improvement integrity 7571 - AR front (1)p1-21(z7) 10/11/06 1:39 PM Page 1 Sasol is bringing to the world innovative and viable energy solutions based on our proven Fischer-Tropsch conversion technology,developed over the last 50 years. Available as gas-to-liquids and coal-to-liquids technology,our solutions come at a time when more and more countries are seeking greater security of energy supply and the opportunity to add value to underutilised gas and coal reserves. our company at a glance Sasol is an integrated oil and gas company with substantial chemical interests. In South Africa,we support these operationsining by m coal and converting it into synthetic fuels and chemicals through our world-renowned,proprietary Fischer-Tropsch (FT) technology. We have chemical manufacturing and marketing operations in South Africa,Europe,Asia and the Americas. Our larger chemical portfolio includes monomers,polymers,solvents,olefins,surfactants,surfactant intermediates,waxes,phenolics,ammonia,fertilisers and commercial explosives. Once we have completed the divestiture of Sasol Olefins & Surfactants,we will no longer produce and market surfactants and surfactant intermediates. We produce oil in Gabon and intend to increase our oil and gas production in future. In South Africa,we refine imported liquid oil into fuels and retail our liquid fuels and lubricants through Sasol convenience centres and Exel service stations. We also sell fuels to other distributors in South Africa and export fuels to sub-Saharan Africa. We produce gas in Mozambique for supply to customers and as feedstock for some of our South African fuel and chemical production. We inaugurated our first international joint-venture gas-to-liquids (GTL) plant in Qatar in June 2006. A second GTL plant,understruction con in Nigeria,is scheduled to be commissioned in 2009. These plants will use the Sasol Slurry Phase Distillate™ process. Formed in 1950,we commenced FT-based production in 1955. We employ more than 30 000 people and remain one of South Africa’s largest investors in capital projects and skills training. Sasol is listed on the JSE Limited in South Africa and the New York Stock Exchange. 7571 - AR front (1)p1-21(z7) 10/11/06 1:39 PM Page 2 the year in review Turnover* (R billion) Operating profit* (R billion) 2006 2006 2005 2005 2004 2004 2003 2003 2002 2002 0 10 20 30 40 50 60 70 0 5 10 15 20 25 *Excluding Sasol O&S in 2004, 2005 and 2006 Gearing (%) Attirbutable earnings and dividend per share (Rand) 2006 2006 2005 2005 2004 2004 2003 2003 2002 2002 0 10 20 30 40 50 03 6 9 12 15 18 Dividends per share Attributable earnings per share Sasol Limited group Financial highlights 2004 2005 2006 % change 2006 2005 2004 Restated Restated 2006 vs Restated Restated US$ US$ US$ 2005 Rand Rand Rand 6 541 8 454 9 961 Turnover million 22 63 850 52 497 44 999 1 329 2 317 3 234 Operating profit million 44 20 732 14 383 9 136 842 1 520 1 618 Attributable earnings million 10 10 373 9 437 5 795 1,38 2,48 2,61 Attributable earnings per share Rand 9 16,73 15,37 9,50 1,32 2,78 3,58 Headline earnings per share Rand 33 22,93 17,27 9,10 0,71 0,84 1,05 Dividend per share Rand 31 7,10 5,40 4,50 9,23 10,58 11,72 Net asset value per share Rand 19 84,05 70,58 57,31 2 869 3 977 5 028 Wealth created million 31 32 230 24 696 19 738 10 560 18 263 26 391 Market capitalisation million 53 187 825 122 379 64 509 11 810 13 173 14 337 Total assets million 17 102 802 87 869 73 346 |2 7571 - AR front (1)p1-21(z7) 10/11/06 1:39 PM Page 3 2005 July August September October November December Sasol’s exploration, Sasol Synfuels We announce that Sasol Mining achieves Sasol Polymers Sasol Oil and Total production and reports a daily coal Tshwarisano Liquid a coal production successfully South Africa complete concession agreement consumption record Fuels Business record for the Sasol completes the their R531 million with the Mozambican of 120 894 tons on Investment,our Synfuels market of uprating of its vinyl Natref clean fuels Ministry of Mineral 27 August. broad-based 169 081 tons for one chloride monomer and project at Sasolburg. Resources becomes black economic day on 14 October. polyvinyl chloride effective for offshore Sasol approves a empowerment plants at Sasolburg. blocks 16 and 19. further grant towards partner,will acquire Appointment of black the rejuvenation of a 25% interest in executive director Sasol board approves New group chief Metsimaholo,the Sasol Oil for an Nolitha Fakude. the construction of a executive,Pat Davies, municipal area amount of sulphuric acid plant becomes Sasol’s first hosting our Sasolburg R1,45 billion. and an ammonium chief safety,health operations. sulphate plant at and environment Our Sasolburg sites are Secunda. officer. We announce the awarded the annual possible divestiture industrial award 2005 sustainable 25% of Rompco sold of our O&S business. from the National development report to iGas. Association for Clean published in Air for outstanding accordance with the contribution towards reporting guidelines of the cause of clean air the Global Reporting in South Africa. Initiative. 2006 January February March April May June Successful Approval received for Sasol Mining Companhia DuPont Safety Inauguration of joint- introduction of design of a 100 MW announces Moçambicana Resources issues the venture ORYX GTL lower-sulphur diesel electricity-generation implementation of Hidrocarbonetos and recommendations of plant in Qatar. produced at Natref facility at Secunda, its BEE strategy International Finance its safety management and Secunda and using waste-gas through the formation Corporation become progress evaluation Agreements signed lead-replacement streams. of the Igoda Coal 30% co-owners of investigation. with China to petrol in South Africa. empowerment venture Sasol’s Temane central commence feasibility with Eyesizwe Coal. processing facility in Sasol Polymers’ new studies for the Mozambique. 220 000 tons per development of two Construction of annum low-density potential coal-to- Escravos GTL plant The JSE Limited,South polyethylene plant liquids plants commences in Nigeria. Africa’s securities started up. in China. exchange,lists Sasol Sasol Chevron co- as one of the six top Rand Merchant Release of DuPont founds the Alliance socially responsible Bank appointed to Safety Resources for Synthetic Fuels performers,out of advise Sasol on its report acknowledges in Europe with 31 companies in the BEE-equity ownership improvement in our DaimlerChrysler, high environmental strategy. South African safety Renault,Royal Dutch impact category. performance. Shell and Volkswagen. Appointment of black Awarded first place in executive directors Sasol selected as a Ernst & Young Award Dr Benny Mokaba and Mergent International for Excellence in Christine Ramon. Dividend Achiever. Corporate Reporting. 3| 7571 - AR front (1)p1-21(z7) 10/11/06 1:39 PM Page 4 our group of companies Sasol Limited The Sasol head office in Johannesburg,South Africa,coordinates group activities and provides certain specialised servicesoup to grcompanies. The names and principal activities of the main businesses and divisions of the Sasol group of companies are featured here. Energy cluster p22 Sasol Mining p24 Sasol Synfuels p26 Sasol Oil Sasol Mining currently mines about 46 million tons (Mt) Sasol Synfuels operates the world’s only commercial Sasol Oil manufactures and markets fuels,road binders a year of saleable coal in the Sasolburg and Secunda coal-based synfuels manufacturing facility at Secunda and lubricants from blending facilities at Secunda and regions for our South African petrochemical plants and in South Africa.