Sasol's headquarters in Rosebank, Johannesburg. Picture: FINANCIAL MAIL
Sasol's headquarters in Rosebank, Johannesburg. Picture: FINANCIAL MAIL

Chemicals giant Sasol, whose share price has almost halved since the beginning of May, yet again delayed the release of financial results on Friday saying it had expanded the scope of a probe into its embattled Lake Charles project in the US.

Results due on September 19 will now be pushed back to no later than the end of October, the company said on Friday.

“The board has resolved to commission additional work under the independent review and to stipulate for in-depth investigation into certain aspects contemplated under the original scope,” Sasol said.

Sasol’s share price slipped as much as 5%, but pared losses and was down 3.47% to R262.12 as of 10.30am on Friday morning. Since the beginning of May, Sasol’s share price has lost 44.7%.

The reaction of the market clearly shows investors are nervous, said PSG Wealth portfolio manager Schalk Louw“If I were an investor, I would be seriously worried,” he said, adding that he would advise waiting for the release of the results before investing in the share.

A key thing to look at in the forthcoming results is Sasol’s debt, said Louw, which may now exceed its market capitalisation. Sasol’s market capitalisation on Friday was R163bn, compared to debt of R131.6bn as at the end of December.

Most investors are already taking a wait-and-see approach ahead of the release of Sasol’s financial results, Anchor Capital investment analyst Seleho Tsatsi said. At this stage, it is just about seeing what the outcome of the review is, but the second delay of the results will increase uncertainty, he added. 

The company, which warned of lower earnings in July as it wrote down the value of assets in North America and Africa by R18.1bn, said previously that it had commissioned an independent review of the Lake Charles project to explain the cost overruns and project delays.

The energy company’s shares fell almost 16% on August 16, when it first announced its results to end-June would be delayed, although it had also pared losses on that day.

Sasol said on Friday that it is still confident its recent guidance on earnings, along with an estimate that the project will cost between $12.6bn and $12.9bn, remains intact.

gernetzkyk@businesslive.co.za