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Investing.com -- South African petrochemical company Sasol Ltd (JO:SOLJ) opted not to pay a dividend on Monday after reporting a 31% drop in half-year profit, citing weaker oil prices and lower sales volumes.
Still, the company’s shares climbed nearly 2% in Johannesburg trading Monday.
For the six months ending December 2024, Sasol’s headline earnings per share fell to 14.13 rand ($0.7712), down from 20.37 rand in the same period a year earlier.
The company, which produces fuel and chemicals from coal and gas, saw revenue decline 10% to 122.1 billion rand. It attributed the drop to a 13% decrease in the average rand price per barrel of Brent crude and a sharp contraction in refining margins.
Sasol’s adjusted EBITDA dropped 15% year-over-year to 23.9 billion rand, while EBIT tumbled 40% to 9.5 billion rand, weighed down by non-cash adjustments. These included a net loss of 6.2 billion rand from remeasurement items and further impairments to its Secunda and Sasolburg liquid fuels refinery units, which remain fully impaired.
On a more positive note, cash generated from operations rose 20% to 17.6 billion rand, supported by favorable shifts in working capital. Meanwhile, capital expenditure declined 6% to 15.0 billion rand.
Sales volumes also slipped by 5% due to lower production and weaker market demand.
Sasol said it withheld a dividend as it ended the period with a negative free cash flow of 1.1 billion rand. The company’s net debt stood at $4.3 billion, surpassing the thresholds outlined in its capital allocation policy.