By Paul Burkhardt
(Bloomberg) – Sasol Ltd. plunged the most in more than two decades after the company delayed its financial results for a month to coincide with a report on what went wrong during construction of its near-$13bn Lake Charles chemical project in Louisiana.
Key insights
- Sasol has revised its estimates for the Lake Charles cost and schedule multiple times and is running out of room to show the project will be profitable.
- A preliminary report commissioned by Sasol’s board into what caused the delays and cost escalation points to “possible control weaknesses,” the company said Friday. It’s looking into whether any more remedial action is required to deal with these.
- Sasol said the cost estimate for Lake Charles remains $12.6-$12.9bn, which is about 50% more than originally planned.
- The company said it’s also still confident in last month’s profit guidance. The South African company said July 25 that adjusted earnings probably declined by as much as 14% in the year through June, reflecting the financial toll of the setbacks at Lake Charles.
Market reaction
- Sasol slumped as much as 16%, the most since September 1998.
