S.Africa’s Sasol sees lower H1 earnings after Lake Charles unit fire

(Adds details on additional costs and background)
Jan 31 (Reuters) – South African petrochemicals group Sasol
said on Friday it expects lower first-half headline
earnings per share (HEPS) and also cut earnings outlook from its
Lake Charles Chemicals Project following a fire mishap at one of
its unit this month.
HEPS is the main profit measure in South Africa and strips
out certain one-off items.
The company said it expects core earnings from the Lake
Charles project to come in between $50 million and $100 million
for the financial year 2020 following an explosion and a fire at
the low-density polyethylene unit in Louisiana, United States on
January 24.
In August, Sasol had lowered its core earnings outlook for
the U.S.-based ethane cracker project to between $150 million
and $300 million from $300 million-$350 million. [nL5N25M3A3]
Problems with the Lake Charles project, which is costing
billions of dollars more than initial estimates, have led to the
resignation of both of the company’s joint chief executives.
[nL8N27D0P7]
Sasol expects its first-half HEPS to be between 4.79 rand
and 7.11 rand, for the six months ended Dec. 31, compared with
HEPS of 23.25 rand ($1.62) last year.
Half-year earnings will also be hit by about 1.7 billion
rand in depreciation charges and nearly 2 billion rand in
finance charges as the Lake Charles units reach beneficial
operation, the South African company said, adding that results
were also dented by a weak macroeconomic environment that
resulted in lower margins and operating profit.

($1 = 14.3325 rand)

(Reporting by Tanishaa Nadkar in Bengaluru, Editing by Sherry
Jacob-Phillips)
(([email protected]; Within UK +44 20 7542
1810; Outside UK + 91 (80) 6182 2723; Twitter:
@TanishaaNadkar;))

Keywords: SASOL OUTLOOK/ (UPDATE 1)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.