Sasol CEO Fleetwood Grobler on H1 results, why he’s optimistic about 2022 dividend

South African fuel products and chemicals company, Sasol, has reported a significant increase in core profits for the six months ending December 31st, 2021. The company has also outlined additional cash generation plans for the year ahead. Despite the positive performance, the board has decided not to declare an interim dividend at this stage. Fleetwood Grobler, CEO of Sasol, joined CNBC Africa to discuss the company's results and future prospects. Grobler explained that while core revenues have increased, there were certain abnormal one-off events that impacted earnings. Factors such as unrealized losses on financial instruments, currency exchanges, as well as impairment reserves, had an effect on the company's EBITDA. However, Grobler highlighted that the underlying performance of the company has been solid, with a 71% increase in EBITDA compared to the previous period. He attributed this performance to strong macroeconomic support in pricing and chemical prices. Despite the strong balance sheet, the decision to not declare a dividend was based on specific triggers related to net debt levels. Grobler outlined that once certain divestment programs are concluded and cash flow generation targets are met, the board will consider the resumption of dividends. He noted that the company is on track to potentially resume dividend payments within the next six months. Sasol has also implemented a focused hedging program for oil products to mitigate downside risks associated with oil price fluctuations. Looking ahead, Grobler emphasized the company's commitment to reducing greenhouse gas emissions and transitioning to more sustainable practices. Sasol aims to reduce its emissions by 30% by 2030 and has made progress in developing gas reforming capacity and renewable energy projects. The company is also exploring opportunities in green hydrogen and green ammonia production. Grobler reaffirmed Sasol's commitment to its strategic targets, including cost reduction, margin improvement, and capital spend goals. Despite the challenges posed by the ongoing pandemic and market volatility, Sasol remains focused on operational efficiency and sustainable growth. The company's long-term vision of net zero emissions by 2050 aligns with global efforts to combat climate change and drive innovation in the energy sector.