Sasol sees a 66% decline in full-year profit due to weaker chemical prices, with headline earnings dropping to 11.5 billion rand. The company revises its dividend policy, skipping the final dividend for 2024.
Bollywood Fever: South African petrochemicals giant Sasol reported a significant 66% decline in full-year profit on Tuesday, largely driven by weaker chemical prices. The company posted headline earnings of 11.5 billion rand ($648.47 million) for the year ending June 30, a sharp drop from the 33.8 billion rand recorded during the same period last year.
As a result of the challenging financial environment, Sasol announced that it would not declare a final dividend for the 2024 financial year, leaving the interim dividend of 2 rand per share declared at half-year as the total payout for the year.
In a strategic shift, Sasol revised its dividend policy, moving away from the previous model based on 2.5-2.8 times core headline earnings per share. The new policy now stipulates that 30% of free cash flow generated will be distributed as dividends, provided that the company’s net debt remains below $4 billion on a sustained basis.
“The disconnect between headline earnings and cash flow generation, as well as elevated leverage levels, has necessitated a revision to the company’s dividend policy,” Sasol explained in a statement.
With net debt standing at $4.1 billion for the 2024 financial year—exceeding the new policy’s threshold—Sasol opted not to declare a final dividend at year-end. This decision reflects the company’s focus on managing its financial position amidst ongoing market challenges.
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