Sasol profit plunges 66% on weak chemical prices, skips final dividend
Adds details on impairments in paragraphs 4-5
Aug 20 (Reuters) -South African petrochemicals company Sasol SOLJ.J 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 11.5 billion rand ($648.47 million) in the year to June 30, compared with 33.8 billion rand 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 275.1 billion rand.
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 69.94 rand, compared to 14 rand 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 2 rand per 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 2.5-2.8 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.
($1 = 17.7341 rand)
Reporting by Nelson Banya; Editing by Eileen Soreng, Kirsten Donovan
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