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Sasol To Review Assets After 15 Per Cent Earnings Drop
(Reuters) — South African petrochemicals group Sasol posted a 15 per cent drop in full-year headline earnings on Monday and said it has begun an asset review to strengthen its capital position.
Headline earnings per share fell to 35.15 rand ($2.67) from 41.40 rand in the year to June 30, with the company citing a stronger rand, a provision for tax litigation and industrial action by workers.
The result was in line with levels the company had previously flagged to the market and Sasol said the asset review would look at what should be retained, grown or sold.
"We are capitally constrained and we want to ensure all the assets in our portfolio are delivering the returns we require," said joint CEO Bongani Nqwababa.
"We have initiated a detailed asset review process to ensure all assets in our portfolio deliver against our stringent financial metrics."
The company also said that savings measures are being implemented at its Lake Charles Chemicals project in North America, which has been hit by delays and increased costs.
"We are confident that the remaining construction, procurement, execution and business readiness risks can be managed within the budget," Sasol said in a statement.
The Lake Charles ethane cracker is 74 per cent complete and has already cost $7.5 billion of the forecast $11 billion, Sasol said, adding that unplanned event-driven risks could still affect costs.
Headline earnings per share, which strip out certain one-off items, are the main profit gauge in South Africa.