You are currently viewing our desktop site, do you want to download our app instead?
Moneyweb Android App Moneyweb iOS App Moneyweb Mobile Web App
Join our mailing list to receive top business news every weekday morning.

Sasol warns possible coronavirus disruptions could hit full-year results

Shares rise, despite the warning.
Image: Supplied

Petrochemicals producer Sasol, the world’s top producer of motor fuel from coal, said on Tuesday its full year results could be hit by potential disruptions to production, supply chains and construction as the coronavirus continues to spread across the world.

Read: Sasol flags refinery slowdowns

Sasol jumps after locking in fuel prices

The company, which has been hit by high debt levels and falling oil and chemical prices, also said its debt costs would rise by another $10 million a year following downward revisions to its credit ratings last month.

However, its shares jumped 22% in early trade as oil prices picked up. The shares had fallen more than 77% since March 9 as oil prices collapsed.

Sasol share price

“The Covid-19 situation is highly dynamic and with infection rates continuing to increase in many countries, there is a risk of interruptions to production, construction and associated supply chains, along with a potential impact on demand and product pricing in some sectors,” the South African company said in a statement.

Sasol said it was evaluating the impact on the business, suppliers and customers and will provide an update in its third quarter business performance metrics report. Its financial year ends on June 30.

The company, the world’s largest producer of motor fuel from coal, said its South African operations would continue to run during the country’s lockdown, however some plants may be required to reduce throughput or shut down due to lower demand from customers due to the lockdown.

South Africa started a 21-day mandatory restriction on the movement of its population last Thursday in an effort to slow down infections from the coronavirus.

Sasol said most of its operations outside of South Africa were continuing with no significant impact on its North American operations or its supply chain, or to construction of the Lake Charles Chemicals Project (LCCP).

Read: Sasol keeps hurting investors, but management remains positive

It said the cost of some of its floating rate debt is partly linked to its credit rating and will increase by around $10 million per annum following downward revisions to its credit rating assessments last month by S&P and Moody’s ratings agencies.

“We will continue to take decisive action to help safeguard the health and wellbeing of our employees and provide essential products to the many stakeholders that rely on us, while we reposition the business to enhance its long-term future,” said chief executive officer Fleetwood Grobler.

Earlier this month Sasol said that it could sell up to $2 billion of shares as it works to ensure it can pay its debt.

Investors have been concerned by the company’s debt, largely due to delays and cost overruns at the LCCP in Louisiana, which forced Sasol’s former joint CEOs to resign last October in a bid to restore shareholder confidence.

Get access to Moneyweb's financial intelligence and support quality journalism for only
R63/month or R630/year.
Sign up here, cancel at any time.


Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in to comment.


Hahaha are you for real? you got to be kidding!

Sasol so on the ball warning investors in advance,

no wonder you just had your share price obliterated in the last few weeks

can not make this up!

Sasol,sell your head office building.

Corporates strive to outdo one another in having the most extravagant and expensive head office quarters to satisfy the big egos of the Executive & Board members.

Apparently the cost was 2billion, stupid !

End of comments.





Follow us:

Search Articles:Advanced Search
Click a Company: