LCCP KEEPS ON HAUNTING SASOL’S PERFORMANCE

SASOL, the global petrochemicals giant, fell 1.92 percent to close at R266 on the JSE yesterday after it announced that it had lowered the earnings from its Lake Charles Chemicals Project (LCCP) in Louisiana and delayed the start-up dates of the derivatives units. Sasol told investors that it had postponed the operation dates of the units after running into “schedule pressure” in most areas. The delay has had a negative impact on earnings before interest, tax, depreciation, and amortisation (Ebitda), a measure of a company’s operating performance.

“As a consequence of these technical issues and the revised beneficial operation dates, the LCCP earnings before Ebitda guidance for the 2020 financial year has been adjusted from $300 million (R4.57 billion) to $350m to $300m,” the company said. The cost guidance for the LCCP remained unchanged at $12.6bn to $12.9bn. “We remain confident that the incremental costs resulting from the delay can be absorbed within the existing base cost and contingency buffer,” the company said.