Sasol keeps hurting investors, but management remains positive
It must have stung like Mercurochrome in a fresh wound to check Sasol’s share price after the chemical group announced its interim results on Monday.
The share price fell to less than R200 within minutes of the market opening – a level last seen in 2005. The new annual low as 60% down on its 12-month high of R490.
Jordan Weir, the equities trader at Citadel Wealth Management, says it’s not hard to see why. “While somewhat expected, Sasol’s interim results were disappointing, owing to a perfect storm created by the combination of a slowing macroeconomic environment, delays and cost overruns at the Lake Charles Chemicals Project [LCCP], and the extensive reshuffling of its management team.
Tough conditions
“Poor results were further exacerbated by a 9% decrease in the price of Brent crude oil in rand terms, which negatively impacted on earnings,” says Weir.
Sasol warned shareholders a few weeks ago that earnings for the first six months of its financial year would be between 68% and 78% lower than the corresponding period in 2018. The actual figures show a decrease of 73%. Earnings fell to R4.5 billion in the half-year to December 2019 (2018: R15.9 billion). Basic earnings per share (EPS) fell to R6.56.
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