Johannesburg-based Sasol Ltd. on Nov. 25 warned that its headline earnings per share (HEPS) for the fiscal half-year ending Dec. 31, 2019, are expected to decline by at least 20 percent, or R4.65 per share, compared to the HEPS of R23.25 reported for the same prior-year period.
Earnings per share (EPS) are also expected to fall by at least 20 percent, or R4.78 per share, versus the EPS of R23.92 reported for the same year-ago period. However, the trading statement warning did not stop there. Sasol said its results for the six months to Dec. 31 “may be further affected by adjustments resulting from its [FY] half year-end closures,” and “this may result in a change in the estimated earnings noted above.” It said the Nov. 25 trading statement only deals with the comparison to the prior-year period.
The possibility of more adjustments relating to Sasol’s massive Lake Charles Chemicals Project (LCCP) in Louisiana no doubt loom large in the minds of investors. Sasol took a serious impairment hit related to the project in its last full fiscal year, ended June 30, 2019. LCCP, which is to include an ethane cracker and ethylene production, has suffered serial delays and massive cost overruns.
The company reported a 45 percent drop in EBIT to R9.7 billion for the 12 months ending June 30, 2019, down from the year-ago R17.75 billion (GM Nov. 1, p. 28).
Final commissioning of LCCP is currently anticipated in the third quarter of next year.