By Ana Monteiro and Lehlohonolo Lehana.
South African fuel and chemical maker Sasol said R55.1 billion ($3 billion) of impairments at its American and South African businesses will hurt its full-year earnings.
The basic loss per share for the year to June 30 will be in a range of R68.82 to R71.48 rand compared with profit of R14 rand a year earlier, the Johannesburg-based company said in a statement Monday.
Sasol wrote down the value of its Chemicals America ethane value-chain unit by R45.5 billion net of tax, primarily due to external conditions “including prolonged softer market pricing and outlook.”
The impairment on its polyethylene, chlor-alkali and polyvinyl chloride and wax value chain in the Africa chemicals business was R3.9 billion net of tax, while the Secunda liquid-fuels refinery in South Africa took a R5.7 billion writedown.
Sasol, which manufactures liquid fuels from coal, reported issues throughout its South African operations earlier this year.
So-called headline earnings per share likely fell to a range of R12.28 and R21.95, representing a drop of as much as 77% from a year earlier, Sasol said. The average estimate by analysts on Bloomberg is for R40.86.
This is yet another blow to Sasol after the Constitutional Court recently dismissed its appeal regarding gas price gouging allegations.
Sasol has been accused of excessively pricing gas for close to a decade, with its markup reaching 72%
The group was, however, recently given some reprieve from the new Minister of Forestry, Fisheries, and Environment, Deon George, who upheld a prior decision allowing Sasol to use an alternative method for measuring sulphur dioxide emissions at its Secunda facility.
Sasol is one of the worst emitters in South Africa, and the reprieve will allow it to regulate its emissions on an alternative emission load basis from April 1, 2025, to March 2030 instead of through the standard particle concentration measures.