the g spot
Still no Sasol payday
Sasol has slashed its gearing levels, though with absolute debt higher now than six months ago, the company is clinging to its cash
Sasol shares shrugged off the board’s decision to withhold a dividend — again — and the stock has been one of the JSE’s best performers year to date with a 27% rise, in no small part thanks to a resurgent oil price. It’s not as if Sasol is firing on all cylinders, though: mining productivity at its coal mines fell 16% over its first half to end-December, squeezing coal available to the group. It’s also pushed out its "Sasol 2.0" transformation programme, though it says the rejig — after which Sasol will be able to compete in a decarbonising economy, and a world in which the oil price holds at $45 a barrel — is still due to be completed by 2025. The FM spoke to CEO Fleetwood Grobler and CFO Paul Victor.
Is the absolute level of debt Sasol carries (R109.2bn as of end-December) as much of an issue as its gearing ratio — which is now dramatically lower than it was a year ago — if we’re to understand your reluctance to pay a dividend?..