Petrochemicals group Sasol’s headline earnings are expected to be as much as 77% lower in the face of challenging market conditions, with continued pressure from depressed chemicals prices and constrained margins.
Headline earnings per share (HEPS) for the year ended June are expected to be between 59% to 77% lower at R12.28-R21.95, it said in a statement on Monday.
Core HEPS were expected to be between R35.03 and R43.62, or 9%-27% lower than a year ago, it said.
The group’s adjusted earnings before interest, tax, depreciation and amortisation (ebitda) are expected to decline by 2%-17% to R54.7bn-R64.7bn.
Earnings for the year were affected by notable noncash adjustments, including a net loss of R55.8bn after tax on remeasurement items mainly due to impairments.
These include Chemicals America ethane value chain (alcohols, alumina, ethylene oxide, ethylene glycols and associated shared assets) cash generating unit (CGU) of R45.5bn and Chemicals Africa’s polyethylene, chlor-alkali & polyvinyl chloride and wax value chain CGUs of R3.9bn.
The impairments are primarily driven by external conditions, including prolonged softer market pricing and outlook, Sasol said.
They also include an impairment at Secunda liquid fuels refinery CGU of R5.7bn and derecognition of a deferred tax asset to the value of R15.3bn, mainly relating to assessed loss carry forward on its Chemicals America operations, which are not anticipated to be used and unrealised gains of R4.7bn on the translation of monetary assets and liabilities, and valuation of financial instruments and derivative contracts.
As a result, Sasol expects to report a basic loss per share of between R68.82 and R71.48 compared with the prior year basic earnings per share of R14.
The group said these factors were partially offset by the stronger rand-oil price, improved refining margins and higher sales volumes. Additionally, Sasol’s stronger operational performance in the fourth quarter contributed to an overall stronger performance in the second half of the year.
The group expects to report its full-year earnings on August 20.
MackenzieJ@arena.africa
Sasol’s full-year earnings hit by impairments
HEPS for the year ended June are expected to be between 59% to 77% lower
Petrochemicals group Sasol’s headline earnings are expected to be as much as 77% lower in the face of challenging market conditions, with continued pressure from depressed chemicals prices and constrained margins.
Headline earnings per share (HEPS) for the year ended June are expected to be between 59% to 77% lower at R12.28-R21.95, it said in a statement on Monday.
Core HEPS were expected to be between R35.03 and R43.62, or 9%-27% lower than a year ago, it said.
The group’s adjusted earnings before interest, tax, depreciation and amortisation (ebitda) are expected to decline by 2%-17% to R54.7bn-R64.7bn.
Earnings for the year were affected by notable noncash adjustments, including a net loss of R55.8bn after tax on remeasurement items mainly due to impairments.
These include Chemicals America ethane value chain (alcohols, alumina, ethylene oxide, ethylene glycols and associated shared assets) cash generating unit (CGU) of R45.5bn and Chemicals Africa’s polyethylene, chlor-alkali & polyvinyl chloride and wax value chain CGUs of R3.9bn.
The impairments are primarily driven by external conditions, including prolonged softer market pricing and outlook, Sasol said.
They also include an impairment at Secunda liquid fuels refinery CGU of R5.7bn and derecognition of a deferred tax asset to the value of R15.3bn, mainly relating to assessed loss carry forward on its Chemicals America operations, which are not anticipated to be used and unrealised gains of R4.7bn on the translation of monetary assets and liabilities, and valuation of financial instruments and derivative contracts.
As a result, Sasol expects to report a basic loss per share of between R68.82 and R71.48 compared with the prior year basic earnings per share of R14.
The group said these factors were partially offset by the stronger rand-oil price, improved refining margins and higher sales volumes. Additionally, Sasol’s stronger operational performance in the fourth quarter contributed to an overall stronger performance in the second half of the year.
The group expects to report its full-year earnings on August 20.
MackenzieJ@arena.africa
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