| Years ended 31 December | ||||||||||
| 1990 | 1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | |
| Operating profit (R/m) | 1 483 | 1 326 | 1 307 | 2 108 | 1 877 | 1 649 | 2 402 | 2 229 | 1 987 | 2965 |
| Interest paid (R/m) | 11 | (98) | (53) | (173) | (250) | (323) | (447) | (454) | (683) | (389) |
| Income tax (R/m) | (691) | (510) | (503) | (596) | (582) | (402) | (568) | (474) | (419) | (667) |
| Net income (R/m) | 803 | 718 | 751 | 1 339 | 1 045 | 924 | 1 387 | 1 301 | 885 | 1909 |
| Total assets (R/m) | ||||||||||
| Capital Expenditure (R/m) | 1 587 | 1 256 | 1 652 | 1 558 | 1 613 | 1 389 | 1 377 | 1 455 | 1 511 | 1542 |
| After tax return on assets (%) | 11,8 | 9,1 | 8,0 | 12,3 | 7,8 | 6,4 | 7,9 | 7,0 | 4,5 | 9,3 |
| Sales Volumes (bn litres) | 19,3 | 20,1 | 21,1 | 23,6 | 24,7 | 28,0 | 29,4 | 33,8 | 31,0 | 26,6 |
| Net income after tax (c/l) | 4,2 | 3,6 | 3,6 | 5,7 | 4,2 | 3,3 | 4,7 | 3,8 | 2,9 | 7,2 |
The above figures reflect the total profits the Sapia member companies earn from their oil importing, refining and marketing activities, including their export trade. As the companies purchase their crude oil and any refined oil requirements on world markets at ruling international prices, they do not earn any further undisclosed profits. (See ** below for the details of the members whose results are included in this aggregation.)
SALES VOLUMES were at the level of 26,6bn litres in 1999, 38% above the 1990 level but 14% below the 1998 level.
NET INCOME AFTER TAX, after declining from R1,3bn in 1993 to R0,9bn in 1995 rose to1,9bn in 1999.Whilst this is the highest level ever achieved, is is necessary, in the light of the very volatile behaviour of oil prices in recent years, to examine the figures before the impact of stock profits and losses in order to understand the underlying trends.
After adjusting for stock profits and losses in 1996, 1997, 1998 and 1999, the figures on a replacement cost basis are:
The dicline in replacement cost in 1999 reflects the low level of refining margins that prevailed during the year. The industry was in a break-even situation in its refining activities during 1999.
TOTAL ASSETS increased from R19,6bn in 1998 to R20,5bn in 1999. This increase reflects the continued capital investment in the industry, amounting to R1,5bn in 1999 and higher levels of stocks and debtors in 1999 due to the rise in world oil prices.
AGGREGATE CAPITAL INVESTMENT for the ten years from 1990 to 1999 was R14,9bn. This exceeded the net income after tax, - R11,1bn over the same period - by R3,8bn.
TOTAL INCOME TAX PAYMENTS during the ten years were R5,4bn. In addition to this the members, during this period, collected R112,0bn in taxes and levies on petroleum products on behalf of the State.
AFTER TAX RETURN ON ASSETS recovered to 9,3% in 1999. After tax profit, expressed as cents per litre, improved from 2.9 c/l in 1998 - the the lowest level ever - to 7,2 c/l in 1999.
However, adjusting to a replacement cost basis, 1999 profits represent a return on assets of 3,2 % and a margin of 2,4 c/l.
These returns, little better than the return on a bank deposit on a FIFO basis, and much lower than a bank deposit on a raplacement cost basis, do not adequately reward investment in the industry and thus place the continued supply of liquid fuels to the nation in jeopardy.
The ability of Sapia members to continue making the required large investment in fixed and working capital will be dependent on gevernment implementing clear policies, which encourage investment in the industry.
** Sapia membership currently consists of the South
African oil refining and marketing companies i.e. BP, Caltex, Engen, Sasol,
Shell, Tepco and Total. As Sasol and Tepco only joined Sapia during 2000 their
results are NOT included in the above aggregation.
The aggregation of
the financial results of its members oil refining and marketing activities,
shown in appendices 1 and 2, has been carried out on Sapia's behalf by Deloitte
and Touche.
Deloitte and Touche aggregated the above financial informaion from amounts and statistics provided by the Sapia members concerned. Deloitte and Touche did not perform any audit on the information supplied nor was the information verified by them in any way.