--  Solid performance in deteriorating markets   --  Operating profit up 53% to R21,5 billion   --  Headline earnings per share up 51% to R21,92   --  Oil hedge cushions the impact of sharp decline in oil prices   --  Strong balance sheet - gearing lower at 2%   --  Overall group production volumes up   --  Oryx GTL, Arya Sasol Polymers ramp up production   --  Competition law compliance under review    Overview   Chief executive Pat Davies says:  

"Sasol's deleveraged balance sheet, cash flows and liquidity position place the company in a favourable position to weather the global economic crisis. Sasol is a solid company supported by comprehensive compliance and risk management processes and a very committed management team. Despite the uncertainty in global markets, our overarching long term strategy remains unchanged: to ensure that we prudently manage our businesses and pursue growth projects that are in the best interests of our shareholders and other valued stakeholders."

Earnings attributable to shareholders for the six months ended 31 December 2008 increased by 45% to R13,2 billion from R9,1 billion in the prior year comparable period, while earnings per share and headline earnings per share increased by 47% to R22,17 and by 51% to R21,92, respectively, over the same period. Operating profit of R21,5 billion was 53% higher than the prior year comparable period. The increase in operating profit was buoyed by higher average crude oil prices (average dated Brent was US$84,75/barrel in 2008 compared to US$81,83/barrel in 2007) and chemical product prices, and a 28% weakening in the average rand/US dollar exchange rate (R8,88/US$ in 2008 compared to R6,94/US$ in 2007). The average crude oil price achieved during the period was cushioned by the effect of the oil hedges during the period which resulted in a net gain of R5 064 million. The recognition of the fair value of the oil hedges resulted in an unrealised fair value gain of R3 334 million at the end of the period owing to the significant decrease in crude oil prices towards the end of December 2008. The increase in operating profit was partially reduced by the European Commission fine on Sasol Wax of R3 678 million (euro 318,2 million).

Cash of R30,8 billion generated by operating activities represents a 118% increase over the prior year comparable period.

Chief financial officer Christine Ramon says:

"Sasol has a positive cash position and a strong balance sheet, and has entered a cash conservation mode. Given that we do not expect oil and product prices to recover in the short-term, we believe that it is wise to plan for an extended period of suppressed and volatile market conditions. Accordingly we have renewed our focus on cost containment, improving operational efficiencies, working capital improvement and capital expenditure reprioritisation. We will adopt a flexible approach to our capital expenditure programme and have, at this stage, reduced our capital expenditure forecast for the next three years by approximately 40%. Importantly we are continuing with the pre-feasibility and feasibility studies relating to our large growth projects. We are fortunate to have many attractive growth projects from which to choose."

Competition law compliance

As announced on 19 January 2009, Sasol is engaged in a comprehensive group-wide review of its compliance with competition law, has lodged a number of leniency applications with the South African Competition Commission and is involved in settlement discussions with the Competition Commission in respect of certain matters pertaining to Sasol Nitro. The Competition Commission has also announced investigations into a number of industries in which Sasol businesses participate. Sasol is still engaged in a group-wide review of its compliance with competition law and continues to interact and co-operate with the Competition Commission in respect of the subject matter of its leniency applications and settlement discussions as well as in the areas that are subject to Competition Commission investigations. The company is continuing to evaluate and enhance its legal compliance controls by the competition law compliance review and remedial steps taken in the process. Certain aspects arising from the competition compliance review have already been announced and, to the extent appropriate, further announcements will be made in future.

   Continued performance from our existing businesses    South African energy cluster    Sasol Mining - higher coal export US dollar sales prices achieved  

Operating profit of R1 434 million was 154% higher than the prior year comparable period, primarily due to higher coal export US dollar sales prices, which were partially offset by lower sales volumes to Sasol Synfuels and the termination of certain coal supply contracts.

Sasol Gas - increased sales volumes at higher gas prices

Operating profit increased by 57% to R1 448 million compared to the prior year comparable period as a result of increased sales volumes at higher gas prices, partially negated by higher cash fixed costs due to increased safety initiatives and preparation for the construction of new compressor stations at Komatipoort.

Sasol Synfuels - decreased production volumes

Sasol Synfuels' operating profits increased by 163% to R20 562 million, despite 3,8% lower production volumes compared to the prior year comparable period as a result of plant instability. The increase in profits associated with higher average oil prices and weaker exchange rates were, however, partially offset by costs associated with the pre-feasibility of the Secunda Growth Programme and significant feedstock price escalations. Included in the operating profit is a gain of R4 909 million relating to the oil hedge.

Sasol Oil - sharp decline in product prices

Sasol Oil recorded an operating loss of R1 626 million compared to an operating profit of R2 031 million for the prior year comparable period as a result of the sharp decline in product prices on the back of fast falling crude oil prices which resulted in negative stock effects and pressure on refining margins.

International energy cluster

Sasol Synfuels International (SSI) - successful production ramp up of Oryx GTL plant

SSI reflected an operating profit of R1 072 million compared to an operating loss of R274 million in the prior year comparable period. This increase was mainly due to the successful ramp up in production of the Oryx gas-to-liquids (GTL) plant and a profit of R509 million realised on the reduction of our economic interest in the Escravos gas-to-liquids (EGTL) Project. Sasol has retained a 10% economic interest in EGTL which is recognised as an investment in an associate. Production at the Oryx GTL plant in Qatar has been increasing steadily and the plant achieved an average production of almost 22 000 barrels a day (b/d) for the six months ended 31 December 2008. For the month of December 2008, the plant achieved an average production of just more than 26 000 b/d.

Sasol and Chevron have reviewed and optimised their business model for co-operation regarding their GTL ambitions and have agreed, in future, to work together directly and on a case by case basis.

Sasol Petroleum International (SPI) - increased oil and gas sales volumes

Operating profit increased by 224% to R1 001 million compared to the prior year comparable period, mainly due to higher oil and gas prices and the weakening of the rand/US dollar exchange rate, as well as higher Etame oil and Temane gas sales volumes. Although exploration expenditure decreased, this was partially offset by expenditure on new business development. The operating profit includes a gain of R155 million relating to the oil hedge.

   Chemical cluster    Sasol Polymers - additional production capacity at Arya Sasol Polymers  

Operating profit increased by 123% to R1 107 million compared to the prior year comparable period, due mainly to additional production volumes at the Arya Sasol Polymers plant, substantially higher margins at our Petlin joint venture in Malaysia and foreign exchange translation gains. This increase in operating profit was partially offset by decreasing polymer sales prices at our South African operations in the latter part of the period.

Sasol Solvents - higher margins, however, reduced sales volumes

Operating profit increased by 146% to R1 366 million compared to the prior year comparable period due to improved sales prices and margins, as well as a weakening rand/US dollar exchange rate resulting in translation gains of R556 million, partially negated by lower sales volumes. We are in the process of reviewing, and if necessary, restructuring the European solvents business as part of our business improvement plan.

Sasol Olefins & Surfactants (Sasol O&S) - lower sales volumes

Operating profit decreased by 71% to R135 million compared to the prior year comparable period, mainly as a result of reduced sales volumes due to the economic downturn, especially in global automotive and construction sectors. Due to its position in the European and US markets, this business was exposed more quickly to the deteriorating worldwide economic conditions.

Despite the general downturn due to the economic crisis, the turnaround process has already improved the robustness of the business. Seven plants with a total production capacity in excess of half a million tons per annum were shut down and headcount was reduced by approximately 300.

We remain of the view that greater shareholder value can be unlocked by continuing to focus on the turnaround process of the Sasol O&S business and by exploring selected group cost optimisation and growth opportunities. While we will continue to carefully monitor and review the performance of all assets in the Sasol O&S portfolio, we do not intend to sell Sasol O&S at this stage and will therefore retain and further optimise this business.

Other chemical businesses - improved performance

Other chemical businesses recorded an operating loss of R2 741 million compared to an operating profit of R885 million for the prior year comparable period due to the inclusion of the European Commission fine on Sasol Wax of R3 678 million (euro 318,2 million). Excluding this once-off item, operating profit increased by 6% compared to the prior year comparable period resulting from improved product margins.

Sustaining Sasol into the future

Pursuing sustainable development opportunities remains a focus area for Sasol:

   --  The recordable case rate for employees and service providers,       including injuries and illnesses, was 0,52 at 31 December 2008       compared to 0,50 at 30 June 2008.   --  Energy-efficiency projects under construction at our operations       include the investment in power generating plants consisting of two       new open-cycle gas turbines, to be fuelled by gas otherwise flared or       wasted.   --  The black public funded and cash invitations of the Sasol Inzalo share       transaction were concluded successfully in September 2008. Preference       share debt of R4,3 billion related to the funded invitation was       issued.   --  Sasol group was rated level 6 by Empowerdex in respect of our black       economic empowerment (BEE) procurement process, meaning that for each       R1,00 spent on Sasol products, customers receive R0,60 BEE       preferential procurement recognition.   --  In support of reducing our carbon footprint we have established a New       Energy business with a focus on identifying and developing lower       carbon emission technology and renewable energy sources.     Growth projects achieving objectives  

Our investment in the pre-feasibility and feasibility studies of large capital projects has not been impacted at this stage.

   Major projects advanced include:    --  Our feasibility study into an 80 000 b/d coal-to-liquids (CTL) plant       in China is on track to be completed during the first half of 2010.   --  The Sasol Synfuels progressive expansion project in South Africa, the       Secunda Growth Programme, will be phased in over a period longer than       originally planned. Phase one, based on natural gas, is in progress       and is expected to increase production by 3% by 2012 compared to the       4% to be achieved by 2010 previously reported. Phase two of the       expansion programme is still in the pre-feasibility stage.   --  In South Africa, our pre-feasibility study into developing another       inland CTL plant (Project Mafutha) near Lephalale in the Limpopo West       area with a capacity of about 80 000 b/d has gained momentum. A       memorandum of understanding has been signed with the state-owned       Industrial Development Corporation of South Africa regarding its       participation in Project Mafutha.   --  In October 2008, SPI commenced seismic work on four onshore blocks in       Papua New Guinea (PNG) as part of a gas exploration campaign in       partnership with a PNG company.   --  Beneficial operation has been achieved for the entire Arya Sasol       Polymers complex. This includes a 1 000 kilo tons per annum (ktpa)       ethylene cracker, a 300 ktpa low density polyethylene plant and a 300       ktpa high density polyethylene plant.   --  In offshore Blocks 16/19 in Mozambique, two exploration wells were       successfully drilled in the period October 2008 to January 2009. Both       wells were found to be gas-bearing, however due to technical       complexity, a significant amount of follow-up work will be required to       assess the commerciality of the discoveries.    Cash conservation and targeted gearing range lowered  

Gearing decreased from 20,5% at 30 June 2008 to 2,3% at 31 December 2008, primarily due to the suspension of the share repurchase programme and entering a cash conservation mode. In response to the global economic crisis, we have lowered our targeted gearing (net debt to equity ratio) from the previous range of 30% - 50% to 20% - 40%. The deleveraged financial position at 31 December 2008 positions the group well to execute its medium-term capital expenditure programme given uncertain credit markets.

During the current period, the company repurchased a total of 3 216 769 Sasol ordinary shares at an average price of R346,45 per share. Total shares repurchased since the inception of the programme in March 2007 represents about 6,4% of the issued share capital at 31 December 2008, excluding the shares issued in terms of the Sasol Inzalo share transaction. 31 500 000 ordinary shares of the repurchased shares were cancelled during the period for a total value of R7,9 billion. 8 809 889 Sasol ordinary shares remain held by Sasol Investment Company (Pty) Limited. At the Annual General Meeting of 28 November 2008, shareholders renewed the authority for up to 15 months to buy back up to 4% of the issued share capital of the company.