Our attributable earnings for the financial year that ended on 30 June 2006 increased by 10% from R9,4 billion to R10,4 billion. Our earnings per share of R16,73 and headline earnings per share of R22,93 were respectively 9% and 33% higher than those of the previous year.

 

We have, with effect from 30 June 2006, in accordance with International Financial Reporting Standard (IFRS) 5, classified our Sasol Olefins and Surfactants (O&S) business as a disposal group held for sale. On 5 September 2006, we announced a write-down of the value of O&S amounting to R2,8 billion, after tax, to reflect its fair value at 30 June 2006. This write-down follows due consideration of valuations undertaken and bids received from interested parties as part of the envisaged divestiture of the business. Excluding O&S (including the write-down and impairments during the year of R0,9 billion), attributable earnings increased by 41% to R13,7 billion and earnings per share increased by 40% to R22,15.

 

 

The group's consolidated recordable case rate (RCR) improved significantly from 1,2 on 30 June 2005 to 0,7 on 30 June 2006, following the substantial interventions that were progressed during the year to improve our safety performance to world-class standards. The RCR measurement is recognised as the foremost safety performance metric in the global oil and petrochemical industries.

 

Generally, our plants operated efficiently during the year.

 

 

Operating profit increased by R6,3 billion (44%) to R20,7 billion during the year under review. Higher international oil prices (average dated Brent US$62,45/b in 2006 versus US$46,17/b in 2005) boosted our operating profit by about R5,6 billion, taking into account the negative effect of the Sasol Synfuels oil production hedge of R1,0 billion incurred in the previous financial year. This benefit was further enhanced by the positive impact of a slightly weaker rand (average rate R6,41: US$1,00 in 2006 versus R6,21: US$1,00 in 2005), which increased our operating profit by approximately R1,3 billion, including positive year-end currency translation effects.

 

 

Cash flow on capital projects amounted to R13,0 billion of which R8,4 billion (65%) was invested in our South African operations. The major projects advanced include the fuel quality enhancement and polymer expansion project (Project Turbo) in South Africa, the Oryx gas-to-liquid (GTL) venture in Qatar and the Arya Sasol Polymers project in Iran.

 

The cost and scheduled commissioning dates of various projects completed or being advanced have been adversely affected by the shortage of engineering, fabrication and construction resources, as a consequence of the significant increase in projects in execution around the world. The commissioning of the Oryx GTL plant has been delayed to the fourth quarter 2006 following damage during early commissioning to a supporting utility system.

 

 

Our gearing (net debt as a percentage of shareholders' equity) reduced from 37% at 30 June 2005 to 29% (excluding O&S) at 30 June 2006.

 

 

The final dividend declared of R4,30 per share brings the total dividend to R7,10 per share which represents a 31% increase compared to the previous year. The dividend cover of 2,3 is outside of our target range of 2,5 to 3,5 times, but when measured against earnings from continuing operations (excluding the O&S write-down) is 3,1, which is within our target range.