Sasol Earnings Take a Hit Following Lake Charles Unit Fire

South African petrochemicals group Sasol said on Friday it expects lower first-half headline earnings per share (HEPS) and also cut earnings outlook from its Lake Charles Chemicals Project following a fire mishap at one of its unit this month. HEPS is the main profit measure in South Africa and strips out certain one-off items.

The company said it expects core earnings from the Lake Charles project to come in between $50 million and $100 million for the financial year 2020 following an explosion and a fire at the low-density polyethylene unit in Louisiana, United States on January 24. In August, Sasol had lowered its core earnings outlook for the U.S.-based ethane cracker project to between $150 million and $300 million from $300 million-$350 million. Problems with the Lake Charles project, which is costing billions of dollars more than initial estimates, have led to the resignation of both of the company’s joint chief executives.

Sasol expects its first-half HEPS to be between 4.79 rand and 7.11 rand, for the six months ended Dec. 31, compared with HEPS of 23.25 rand ($1.62) last year. Half-year earnings will also be hit by about 1.7 billion rand in depreciation charges and nearly 2 billion rand in finance charges as the Lake Charles units reach beneficial operation, the South African company said, adding that results were also dented by a weak macroeconomic environment that resulted in lower margins and operating profit.

($1 = 14.3325 rand)

(Reporting by Tanishaa Nadkar; Editing by Sherry Jacob-Phillips)