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Sasol warns of annual loss

Lower global chemical and refining margins and a 18% drop in the rand oil price hurt earnings.
Image: Bloomberg

South Africa’s Sasol warned on Tuesday it will report an annual loss after a drop in oil and chemical prices and the impact of the coronavirus pandemic hit earnings.

The world’s top producer of motor fuel from coal said its headline loss per share is expected to be between R8.72 and R14.86 in the year to June 30, compared with headline earnings of R30.72 per share during the same period a year ago.

Sasol said lower global chemical and refining margins and a 18% decrease in the rand per barrel price of Brent crude oil had hurts earnings.

Adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) is also expected to fall by as much as 37% to between R30 billion to R39.5 billion.

The company said it had recorded impairments in some of its cash generating units after a weakening economy and the fair value impact of starting discussions to find a partner for its U.S. Base Chemicals assets.

Sasol has embarked on a review of its assets and set out to find a partner at its U.S. Base Chemicals operations in an effort to avoid a potential $2 billion rights issue after a slump in the oil price and the impact of the new coronavirus weighed on the company’s ability to pay its debt.

Read: Sasol’s debt reduction programme on track

Investors have been concerned by the company’s debt, largely due to delays and cost overruns at its Lake Charles Chemicals project (LCCP) in Louisiana, that forced its former joint-CEOs to resign in a bid to restore shareholder confidence.

Sasol is expected to release its full-year results on Aug. 17.

The share fell immediately on the market opening on Monday, down 2.36% to R148.06 by 09:10.

Sasol intraday share price movement

Read the full Sens announcement here.

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This lot is like ESKOM.

They are forever writing something off. Once off item kings of the JSE.

You were born a write off!

With less than a week to go before the actual results are released, the best they can come up with is a 70% spread in the expected headline loss number. Guess they are hoping for a busy week ahead.

Hahahaha thats the JSE Listings Requirement range that is allowable. Go for smack in the middle as the value as it stands on making the announcement. Accountant may fiddle and its moves around in the next few days, but likely board has already sat and approved the material items etc. Heavy lifting is done.

Sell! Write off almost 3x ebitda. NAV / Fair value will be around R100 until chemical earnings churn in in the medium term

I hope all those traders who made a killing from buying at R20.00 have taken the money and run by now.

Sadly I was fast asleep …

End of comments.

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