Sasol delivered a strong set of results for the year ended 30 June 2021. Our earnings before interest and tax (EBIT) of R16,6 billion increased by more than 100% compared to the prior year. This performance was underpinned by a strong cost, working capital and capital expenditure performance, despite the continued impact of the COVID-19 pandemic and adverse weather events.

A notable gross margin recovery was recorded in the second half of the financial year, supported by the combined impact of higher Brent crude oil and chemicals prices, offset by a stronger rand/US dollar exchange rate.

Our earnings were mainly impacted by the following non-cash adjustments the net of which amounted to R15,4 billion:

• Net impairments of R28,7 billion mainly due to adjustments to our long-term exchange rate outlook and higher cost to procure gas over the longer term;
• Net profit on disposal of businesses of R2,2 billion, including the Air Separation Units;
• R3,4 billion gain on the realisation of the foreign currency translation reserve (FCTR), mainly on the divestment of a 50% interest in the LCCP Base Chemicals business;
• Gains of R5,5 billion on the translation of monetary assets and liabilities due to a 18% strengthening of the closing rand/US dollar exchange rate compared to June 2020; and
• Gains of R2,3 billion on the valuation of financial instruments and derivative contracts.