Sasol H1 profit falls 24%, cuts dividend amid low oil prices
Sasol said headline earnings fell to R24.28 per share in the six months ended 31 December, 2015.
JOHANNESBURG - South African petrochemicals company Sasol on Monday posted a 24 percent drop in first-half earnings and cut its interim dividend by almost 19 percent amid low oil prices.
Sasol said headline earnings, a key profit measure that strips out some one-off items, fell to R24.28 per share in the six months ended 31 December, 2015, from R32 per share in the same period a year earlier.
The company had flagged that it expected earnings to fall 23-28 percent, dragged down by a 47 percent fall in the oil price for the period.
Commodity chemical prices were also lower, but the company said the rand's 24 percent fall against the US dollar "provided a partial buffer."
Sasol has focused on cash conservation to contend with depressed oil prices and said its response plan had realised R10.8 billion in cash savings over the period.
The company said it now expects to save between R65 billion and R75 billion by financial year 2018, up from its previous target of R30 billion to R50 billion.
Headcount reductions have been part of the process, "not all of which will be sustainable in the longer term," it said.
Sasol also said it had decided to review its long-term strategic interest in its Uzbekistan gas-to-liquids investment and that it expects the review to be completed in the second half of the 2016 financial year.
Sasol's Canadian shale gas assets generated a loss from operations of almost R7.7 billion, including an impairment of R7.4 billion, underscoring the impact of low gas prices on the sector.