South African petrochemicals group, Sasol, on Wednesday hinted that it will trim dividend payouts to save cash as slump in oil prices made its share value fall by over 10 percent. Oil dropped below $62 a barrel on Wednesday, according to data from Reuters.

A statement released by the Johannesburg Stock Exchange listed firm said the company is changing its progressive dividend policy, which sees dividends improved or maintained in line with the company’s earnings, as part of its response to the current low oil price environment. “In the context of a low oil price environment, the Group’s earnings will be negatively impacted. The current macroeconomic conditions have therefore necessitated a reassessment of the Company’s progressive dividend policy.”

The revised policy is based on a dividend cover of 2.2 to 2.8, similar to the dividend cover rates of the company applied during the 2008 to 2014 financial years.

The Board considers that, in the current environment, this revised dividend policy, together with the other components of the Response Plan, will provide sufficient flexibility for the Company to manage its balance sheet. This will also allow the Group to execute its growth programme while returning value to shareholders through dividend payouts. “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,” Reuters quoted spokesman Alex Anderson to have said. But a statement by the company says the interim dividend will be announced at the same time.

Other components of Sasol’s Response Plan include capital portfolio phasing and reductions, capital structuring, working capital improvements, margin enhancement and further cash cost reductions.