Sasol reports 66% drop in profit, withholds final dividend

Sasol has reported a 66% drop in profit for the year to end-June 2024.

The global chemicals and energy company said its results were negatively impacted by challenging market conditions, with continued pressure from constrained margins and depressed chemicals prices.

This resulted in a 5% drop in turnover of just over R275 billion compared to the previous year.

Sasol recorded an impairment loss of R56,7 billion net of tax (R74,9 billion gross), with headline earnings falling 66% to R11.5 billion.

Headline earnings per share (HEPS) also plunged by 66% to 18,19 cents per share.

It decided to withhold its year-end dividend, saying "the disconnect between headline earnings and cashflow generation, as well as elevated leverage levels, has necessitated a revision to the company’s dividend policy".

The company said however that a stronger operational performance in the fourth quarter of 2023 contributed to an overall stronger performance in the second half of the year.

In conversation with Stephen Grootes, new CEO Simon Baloyi said his strategy first was to focus on Sasol's entire global asset base.

"If you look at our energy and our chemical businesses - because they do help each other in difficult times, you can see now as the global economy in terms of the weak chemical demand persists, we're still able to generate strong cash flows."

"So, yes, this year because of this impairment that we took we're posting a loss... However, if you look at the business we actually had a strong cash flow generation especially in the second half. In December we had minus R6 billion and by the end of the (financial) year now we actually had R8 billion cash flow generation."

Simon Baloyi, CEO - Sasol

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