This sent the company’s shares sliding over 10 per cent.
The company said in a statement that it was changing its progressive dividend policy – which meant maintaining or growing dividends – for a cover range based on earnings.
This policy gives [DATA SOL:Sasol] the flexibility to pay lower dividends rather than maintaining or growing them.
“We are underway with the accounting process to finalise our interim results ahead of our earnings announcement on 9 March. Accordingly, the board has yet to decide on the dividend,” spokesman Alex Anderson said.
Sasol would now use a dividend cover range of 2.2 to 2.8 – which it has used in the past, he said.
“By definition a change in dividend policy is a surprise to investors, so you are seeing a sell-off. We are expecting a big dividend cut,” one analyst, who has a buy recommendation on Sasol and declined to be named, told Reuters.
Oil dropped below 62 US dollars a barrel on Wednesday with prices hovering near six-year lows on worries of a glut caused primarily by unexpectedly high production of US shale crude.