S.Africa’s Sasol cuts final dividend, seeks ways to reverse impairment

JOHANNESBURG (Reuters) -South African petrochemicals company Sasol cut its final dividend by almost a third on Wednesday after a 35 billion rand ($1.87 billion) non-cash impairment hit annual profit.

On a full-year basis its dividends were still up by 16%, having paid an interim dividend of 7 rand per share compared with nothing at the mid-year stage the previous year.

Sasol declared a final dividend of 10 rand per share for the 12 months to June 30, down from 14.7 rand per share a year earlier, having warned this month that its Secunda operations near Johannesburg had been hit hard by higher interest rates and the future production implications of emission-reduction costs.

This dragged down its basic earnings per share, which includes impairment costs, by almost 78%.

The impairment reflects difficulties that threaten the post-2030 viability of Secunda, which produces fuel from coal and natural gas.

But the company said it is “progressing a number of initiatives” to restore value in that part of the group’s business, CFO Hanre Rossouw told Reuters.

Sasol, which has often been criticised by activists and environmentalists for not doing enough to reduce emissions, has targeted a 30% reduction in greenhouse gas emissions by 2030 and net zero by 2050.

It had reinstated dividends last year after emerging from near-bankruptcy in 2020 when the COVID-19 pandemic shook global markets and sent crude oil and petrochemicals prices tumbling.

Since then, the company sold a clutch of assets and cut costs while benefiting from stronger crude oil price.

The company posted a 13% rise in full-year headline earnings per share, the main profit measure in South Africa.

($1 = 18.7385 rand)

(Reporting by Tannur AndersEditing by Promit Mukherjee and David Goodman)