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Africa|Business|Coal|Petrochemicals|PROJECT
Africa|Business|Coal|Petrochemicals|PROJECT
africa|business|coal|petrochemicals|project

Sasol swings to R91.3bn annual loss on lower oil prices, writedown

17th August 2020

By: Reuters

  

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South African petrochemicals group Sasol reported an annual loss on Monday, hit by a writedown of R111.6-billion and a drop in oil and chemical prices due to the coronavirus outbreak.

The world's top producer of motor fuel from coal reported a loss of R91.3-billion for the full year ended June 30, compared with earnings of R6.1-billion in the prior year.

But core headline earnings per share, the primary profit gauge in South Africa that strips out certain one-off items, fell 61% to R14.70 for the year from R37.65 a year earlier.

Sasol said earnings were severely impacted by a collapse in oil prices and the economic impact of Covid-19 in the second half of the year despite good production and higher oil prices in the first half of the year.

The company said it recorded impairments of R111.6-billion, with R72.6-billion related to its base chemicals business and R38.8-billion related to other assets mainly in South Africa.

Earnings were further impacted by R3.9-billion in depreciation charges and R6-billion rand in finance charges for the year as its Lake Charles Chemicals project (LCCP) units reached beneficial operation, Sasol said.

Investors have been concerned by the company's debt, largely due to delays and cost overruns at LCCP in Louisiana, that forced its former joint chief executive officers to resign in a bid to restore shareholder confidence.

Sasol said total debt for the year stood at R189.7-billion, compared with R130.9-billion a year earlier.

The petrochemical firm said it would continue to suspend dividends to protect liquidity amid ongoing economic uncertainty.

Edited by Reuters

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