Sasol completes its review of cost overruns at Lake Charles

The company has twice delayed its financial results for the year to end-June.  

Chemicals company Sasol said it has completed its review into cost overruns at its Lake Charles project in the US.

The company has twice delayed its financial results for the year to end-June due to the probe, and now expects to release its results on Monday October 28.

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

It said on Tuesday that it is considering the findings to determine an appropriate course of action, which will be announced in due course.

The company announced a delay in its results in August then again in September after it extended the mandate of the probe. The delay means Sasol is at risk of suspension, though the company said on Tuesday this threat will be removed once the results are released.

Sasol’s share price has lost 36.4 percent since further cost overruns were announced in May. Since June 2018, the company’s market capitalisation has fallen 45 percent.

The company said in September that it remains confident the project will cost $12.6 billion-$12.9 billion (about R187.36 billion-R191.82 billion). It was initially expected to cost $8.9 billion.