SASOL FREEZES TOP SALARIES
Cash reserves up to R53bn
EMPLOYEES and managers of petrochemical and mining group Sasol have been forced to absorb financial “pain” after the company froze salaries and parted ways with some of its workforce.
This was revealed yesterday during the release of the company ’ s financial results for the year ended June 2015, following a tough trading environment sparked by the decline in crude oil prices.
Outgoing Sasol chief executive David Constable said Sasol has shed 2 481 workers through early retirement and voluntary severance, which brought the company’s total head count to 30 919.
Sasol will also save R770million by not giving its senior, top and middle managers a pay rise, while share- holders will walk away with a lower dividend payout of R18.50 per share. The shareholders last year received a dividend payout of R23.50.
He said the severance packages have cost the company R1.9-billion.
Constable, fielding questions after the presentation, told Sowetan that all workers have received a pay rise, while those in the senior, top and middle management levels, along with shareholders, will have to stomach the pain.
He said those in management will be compensated when the company starts performing well.
The company saw its headline earnings per share plummet by 17% to R49.76.
“Our net cash position improved by 39% from R38billion in June 2014 to R53billion at 30 June 2015, driven largely by the stronger than expected operational busi- ness performance,” Constable said.
South African Chemical Workers Union’s Tumediso Modise said the unions have since late last year been engaged in talks with Sasol to try to avoid retrenchments.
Modise said it was, however, unfair for Sasol to restructure its workforce and fail to give out pay increases to management while the company had R53-billion in cash reserves.
Sasol financial director Bongani Nqwababa said the JSE-listed company’s structuring programme known as business performance enhancement programme (BPEP) resulted in the conversion of about 300 temporary posts to permanent positions and the addition of nearly 300 employees for its growth projects.
“The remaining restructuring processes will be completed early in the 2016 financial year. The BPEP’s actual cost savings at 30 June 2015 amounted to R2.5-billion, which is R1-billion higher than the forecasted savings of R1.5-billion previously communicated.
“The actual savings represent an annual run rate of R2.8-billion,” he said.
Nqwababa said the company would “continue to drive sustainable cost savings of R4-billion by the end of the 2016 financial year, with an exit run rate of at least R4.3-billion”.