South African petrochemicals company [DATA SOL:Sasol Limited] on Monday lowered its full-year dividend after weaker oil prices hit earnings.
Headline earnings per share, a popular measure in South Africa which strips off some one-off items, fell to 49.76 rand from 60.16 a year earlier.
It lowered its dividend to 11.50 from 13.50 rand.
The company which relies on oil for 40 percent of its revenue, said its fall was partly offset by a weaker rand exchange rate, higher sales and cost cuts.
“Through our tailored business planning, we are making steady progress in mitigating the challenges of a low oil price environment,” outgoing chief executive officer David Constable said in a statement.
The price of Brent crude oil fell by more than a third during the reporting period, which ended on June 30, with shares in the company falling by a similar margin.
Sales volumes of liquid fuels increased by 5 percent and performance and base chemical sales were up by 2 percent, the company said.
The world’s top maker of motor fuel from coal, Sasol is cutting costs through measures including delaying major capital projects and lower dividends.
The company said its plans to “conserve cash” had enabled it to pursue growth projects in southern Africa and the United States.
“Our response plan achieved a 8.9 billion rand cash conservation benefit, which is at the upper end of our 6 billion rand to 10 billion rand target range,” Sasol said. It cut 2,500 jobs through “voluntary separation” and early retirement.
Sasol said it expected Brent to trade at $50 to $60 per barrel during the 2016 financial year, which could hurt business.
“We expect oil prices to remain low until the end of the 2017 calendar year,” it said.