In South Africa Sasol says H1 profit falls 24 pct, cuts dividend amid low oil prices

The company said it now expects to save between 65 billion rand and 75 billion rand by financial year 2018, up from its previous target of 30 billion rand to 50 billion rand.

  • Published:
A petrol station is seen in Soweto, March 11, 2009. REUTERS/Siphiwe Sibeko play A petrol station is seen in Soweto, March 11, 2009. REUTERS/Siphiwe Sibeko (Reuters)
24/7 Live - Subscribe to the Pulse Newsletter!

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 24.28 rand per share in the six months ended Dec. 31, 2015, from 32 rand 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 U.S. dollar "provided a partial buffer."

Sasol has focused on cash conservation to contend with depressed oil prices and said its "response plan" had realised 10.8 billion rand ($702 million) in cash savings over the period.

The company said it now expects to save between 65 billion rand and 75 billion rand by financial year 2018, up from its previous target of 30 billion rand to 50 billion rand.

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 7.7 billion rand, including an impairment of 7.4 billion rand, underscoring the impact of low gas prices on the sector.

($1 = 15.3823 rand)

Do you ever witness news or have a story that should be featured on Pulse Nigeria?
Submit your stories, pictures and videos to us now via WhatsApp: +2349055172167, Social Media @pulsenigeria247: #PulseEyewitness & DM or Email: eyewitness@pulse.ng. More information here.