Improved safety performance, with recordable case rate down to 0,23
Added 12 new Retail Convenience Centres
Normalised cash fixed costs increased by 1,9% below inflation
EBIT* margin up 1%, supported by higher refined product prices, despite lower sales volumes and stronger rand
Lower liquid fuel sales due to interruptions at Secunda Synfuels and Natref
Natref showing signs of strong delivery
Lower gas sales volumes due to drop in demand
Stepped up work to deliver cleaner fuels; established dedicated team to drive an integrated effort
Sasol Oil achieved a level 3 B-BBEE score, up from level 7 in 2017
ORYX GTL achieved capacity utilisation at 95%
NERSA launched an application to Constitutional Court following Supreme Court of Appeal ruling on NERSA approved maximum gas prices and transmission tariffs
We are embedding our Continuous Improvement initiative to further reduce costs to enhance value and our robustness, focusing on simplification and improved efficiency through digital platforms. We are pursuing opportunities to grow our retail marketing channel in Southern Africa through organic growth as well as possibly through an acquisition of an existing network of sites.
In our efforts to continuously enhance customer experience and broaden our RCC offerings, we are investigating new digital and advanced mobility customer offers. We continue our work to deliver an optimal clean fuels solution for both Secunda Synfuels and Natref to ensure that we remain both relevant and competitive in a rapidly changing environment. However, we believe that financial support mechanisms must be developed through agreement between industry and the South African government to enable the sustainability and delivery of cleaner fuels from South African refineries. We are committed to promoting improved sustainability and are investigating all sustainable gas monetisation options in Mozambique, aligned to opportunities that meet both Sasol and Mozambican government objectives. In Qatar, we remain focused on maintaining high utilisation rates and an excellent safety record. In Nigeria, we continue to support the increased utilisation of EGTL.
Every day, vehicles fill up with Sasol fuel across 399 sites, making Sasol one of the strongest brands in South Africa. In line with our strategy to increase our South African retail presence and maximise margins, we opened 12 new Sasol RCCs in the year. Brand Finance confirmed Sasol as one of the most valuable brands in South Africa in 2018, positioning us to extract additional value from our retail asset. At year end, we marketed 33% of Sasol production through our own retail outlets and commercial channels.
Our loyalty schemes, such as that linked to Absa rewards, are helping strengthen customer relationships in key markets, with Absa reward members tending to shop more frequently and spend more per visit. Sasol’s innovative technology has created Sasol Turbodiesel™ ULS 10ppm, a first-to-market diesel. This, together with a Sasol proprietary deposit-control additive, ensures the cleanest diesel available in South Africa and ultimately improves fuel economy.
In a challenging South African retail liquid fuels market, liquid fuel sales volumes declined due to lower volumes from Secunda Synfuels and Natref. Through focused efforts at Natref, we turned around the business performance and saw an increase in production volumes in the second half of the year. We expect this positive trend to continue. EBIT benefited from higher refined product prices, partially offset by a stronger rand. Cash fixed costs normalised for the impact of the power purchase agreement with Eskom coming to an end in 2017, increased by only 1,9%, which is well below inflation, a result of strict cost control.
Gas sales to the external market declined by 3%, due to lower demand in Mozambique. The available gas was, however, utilised internally in our integrated value chain.
ORYX GTL delivered a strong production performance, with an average utilisation rate of 95%, growing volumes by 1% and contributing R1,2 billion to Energy’s EBIT. We started investigating options to channel some existing GTL product volumes to new niche applications in high quality base oils. In Nigeria, the efforts of Escravos GTL (EGTL) to reduce costs and improve plant efficiency progressed well, with a marked improvement in average utilisation rates. This resulted in 75% higher production in the fourth quarter compared to the third. In line with our value-based strategy, we scrapped plans to pursue a US GTL project or any other greenfield GTL project.