Sasol Limited: Change to Dividend Policy and Segmental Reporting

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Feb 18, 2015, 05:47 ET

JOHANNESBERG, February 18, 2015 /PRNewswire/ --

In response to the current low oil price environment, an initiative to conserve cash over the next 30 months was announced by Sasol on 28 January 2015 ("Response Plan").

Sasol's Response Plan comprises 5 key components, namely:

capital portfolio phasing and reductions;
capital structuring;
working capital improvements;
margin enhancement; and
further cash cost reductions, supplementing the Group's target of at least R4 billion annual costs savings driven through the company-wide business performance enhancement programme, which was launched in 2013.

Looking specifically at the capital structuring lever, the management team and the Sasol board of directors ("Board") evaluated the Company's progressive dividend policy, which had been introduced to maintain or improve dividends in line with the Company's anticipated sustainable growth in earnings.

The Company's dividend policy takes into consideration various factors, including overall market and economic conditions, the Group's financial position, capital investment plans as well as earnings growth.

In the context of a low oil price environment, the Group's earnings will be negatively impacted. The current macroeconomic conditions have therefore necessitated a reassessment of the Company's progressive dividend policy.

At a special meeting of the Sasol Board, the directors approved a change in the Company's dividend policy. The revised policy is based on a dividend cover range, which will be similar to the dividend cover rates applied during the 2008 to 2014 financial years.

The Board considers that, in the current environment, this revised dividend policy, together with the other components of the Response Plan, will provide sufficient flexibility for the Company to manage its balance sheet. This will also allow the Group to execute its growth programme while continuing to return value to shareholders through dividend payouts.

Another important component of the Company's Response Plan efforts is the ongoing refinement of its operating model, and the further optimisation of its management structures to ensure greater focus and efficiency while enabling additional cost reductions.

To this end, earlier this month, Sasol announced changes to its top management structures. The Company has also decided to combine two of its reportable segments, Southern Africa Energy and International Energy, and their associated management structures, into one segment, now called Energy.

Given this decision, Sasol's segmental reporting will now consist of six reportable segments: Mining, Exploration and Production International, Energy, Base Chemicals, Performance Chemicals, and Group Functional Support.

Sasol will be announcing its results for the first half of the 2015 financial year on 9 March 2015. The interim dividend will be announced at the same time, and the segment information contained in these results will be disclosed on this revised basis.

Disclaimer - Forward-looking statements: Sasol may, in this document, make certain statements that are not historical facts and relate to analyses and other information which are based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to our future prospects, developments and business strategies. Examples of such forward-looking statements include, but are not limited to, statements regarding exchange rate fluctuations, volume growth, increases in market share, total shareholder return and cost reductions. Words such as "believe", "anticipate", "expect", "intend", "seek", "will", "plan", "could", "may", "endeavour" and "project" and similar expressions are intended to identify such forward-looking statements, but are not the exclusive means of identifying such statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and there are risks that the predictions, forecasts, projections and other forward-looking statements will not be achieved. If one or more of these risks materialise, or should underlying assumptions prove incorrect, our actual results may differ materially from those anticipated. You should understand that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors are discussed more fully in our most recent annual report under the Securities Exchange Act of 1934 on Form 20-F filed on 29 September 2014 and in other filings with the United States Securities and Exchange Commission. The list of factors discussed therein is not exhaustive; when relying on forward-looking statements to make investment decisions, you should carefully consider both these factors and other uncertainties and events. Forward-looking statements apply only as of the date on which they are made, and we do not undertake any obligation to update or revise any of them, whether as a result of new information, future events or otherwise.

Cavan Hill
Senior Vice President: Investor Relations
Sasol Limited
+27-11-441-3113

SOURCE Sasol Limited