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By Paul Burkhardt
(Bloomberg) – Sasol Ltd. delayed its annual financial results for a second time to allow for a more in-depth investigation into what went wrong during construction of its $13bn Louisiana chemical project.
The company now expects to publish results no later than Oct. 31, compared with a previous date of Sept. 19, which was a month later than originally planned.
- The Lake Charles mega-plant has become an increasing worry for investors after costs ballooned and the project fell behind schedule. Sasol said last month a preliminary report pointed to possible “control weaknesses,” a phrase it described as a standard financial reporting term, though some investors dismissed it as vague.
- Sasol’s board has decided to commission additional work under the independent review, which is targeted for completion by mid-October. The probe has been widened to include the company’s technology division and will look at whether the “root cause” of cost overruns was present in the 2018 financial year.
- Management is coming under mounting pressure as the problems at Lake Charles have slowed plans to expand internationally and increase chemicals manufacturing. Sasol has been asked by some major fund managers to consider executive changes, people familiar with the matter said last month.
- Sasol shares sank as much as 5% on Friday, and traded down 2.9% at R263.69 as of 12:44pm in Johannesburg. The company’s market value has shrunk by more than half over the past 12 months.
- So far, the board hasn’t seen anything that would require it to revise its profit guidance for the past financial year. Sasol said in July that adjusted earnings probably declined by as much as 14% in the year through June, reflecting the effect of setbacks at Lake Charles.
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