Sasol profit plunges 66% on weak chemical prices, skips final dividend
South African petrochemicals company Sasol reported a 66% fall in full-year profit on Tuesday, mainly due to weaker chemical prices, and skipped a final dividend.
Headline earnings, which strip out one-off items and are the main profit measure used by South African companies, were R11.5-billion in the year to June 30, compared with R33.8-billion a year earlier.
Sasol, which produces liquid fuels and chemicals from coal, said its income was hit as depressed chemicals prices exerted pressure on margins. Turnover fell 5% to R275.1-billion.
The company wrote down $3-billion in the carrying value of its chemicals and fuel assets mainly due the softer market pricing and outlook, resulting in a basic loss per share of R69.94, compared to R14 basic earnings per share the previous year.
The biggest impairments, totalling nearly $2.6-billion, were recorded at its American chemicals unit.
Sasol did not declare a final dividend, leaving the interim R2 a share declared at half-year as the full-year payout for the 2024 financial year.
The company said it had changed its dividend policy, which was previously based on 2.5 to 2.8 times core headline earnings per share, to 30% of free cash flow generated, provided that net debt is below $4-billion on a sustained basis.
"The disconnect between headline earnings and cashflow generation, as well as elevated leverage levels, has necessitated a revision to the company's dividend policy," Sasol said in a statement.
Net debt for 2024 stood at $4.1-billion, just above the dividend trigger level.
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