Chemical producer Sasol earnings to plunge as much as 84%.
By Paul Burkhardt.
Sasol shares dropped the most in five months after the fuels and chemicals producer said the poor performance of South Africa's state-owned companies has affected its business and is expected to result in lower earnings.
The government-run firms "have constrained our supply chains and resultant sales volumes," Sasol said Monday in a trading statement ahead of 2023 annual results. Disruptions on state rail company Transnet's network have caused delays and an influx of trucking that clogs roads, while the most industrialised nation on the continent experiences frequent blackouts as power utility Eskom fails to meet demand.
The prices Sasol charges for its products are based on the value of crude oil, which declined later in its financial year ended June 30, the Johannesburg-based company said. Basic earnings per share are expected to have dropped by as much as 84%, according to the statement.
The shares fell as much as 6.1%, the most since March 15. South Africa’s benchmark equity index was steady.
Sasol also booked a full impairment of the Secunda liquid fuels plant as a result of "cost assumptions and a revised production profile" based on its emission reduction plan. The company has submitted an appeal to South Africa’s minister of forestry, fisheries and environment over the National Air Quality Office's decision not to exempt the complex from air-pollution limits.