Sasol scraps dividend as Lake Charles continue to bite into profits

South African petrochemicals giant Sasol has experienced a significant drop in profits, to the tune of a 74 percent decrease in headline earnings per share, which now stands at R5.94. The main cause of this financial setback has been attributed to ongoing issues at the Lake Charles Chemicals project in the United States, as well as lower chemical and Brent crude oil prices. Fleetwood Grobler, the CEO of Sasol, recently sat down with CNBC Africa to discuss the challenges the company is facing and the strategies they are implementing to overcome these obstacles. During the interview, Grobler outlined the difficulties Sasol has encountered at the Lake Charles Chemicals project, stating that they had been expecting an improvement in performance at the facility, but various setbacks have continued to hamper progress. He mentioned that a combination of factors, including unexpected outages and slower-than-projected ramp-up times, have contributed to the delays in achieving the desired results. Grobler also addressed the impact of market conditions on Sasol's financial performance, highlighting the downward pressure created by softer chemical and Brent crude oil prices. He noted that while the company had taken steps to optimize costs and improve operational efficiency, the challenges at Lake Charles had overshadowed these efforts, leading to a significant decline in profitability. In response to these challenges, Sasol made the difficult decision to forego paying a dividend to its shareholders, redirecting the funds towards addressing the issues at the Lake Charles project and shoring up the company's financial stability. Grobler emphasized the importance of prioritizing the long-term sustainability of the business over short-term financial gains, signaling Sasol's commitment to weathering the current storm and emerging stronger on the other side. Looking ahead, Grobler expressed confidence in Sasol's ability to navigate the current difficulties and emerge stronger as a result. He highlighted the resilience of the company's operations and the dedication of its workforce in overcoming challenges and driving future growth. By focusing on operational excellence, cost optimization, and strategic decision-making, Sasol aims to position itself for long-term success in the ever-evolving petrochemical industry. Despite the current challenges, Grobler remains optimistic about Sasol's future prospects and the company's ability to overcome the obstacles it currently faces. By leveraging its strengths, addressing its weaknesses, and staying true to its core values, Sasol is poised to reclaim its position as a leader in the global petrochemical market.