South African energy firm Sasol has delayed the release of its annual financial results by a month to give it time to assess possible "control weaknesses" identified at its flagship Lake Charles petrochemicals project in the US.
The results were due to be released next week but have been pushed back to 19 September. It comes after a preliminary report from an independent review into cost overruns and schedule changes at Lakes Charles was presented to the board this week.
"The report contains observations which point to possible ... control weaknesses. Management and the board will assess such control weaknesses and identify whether any further remedial actions are required," Sasol said. An external audit into these assessments is also being carried out.
Sasol raised the cost estimate for the Lake Charles project by $1bn to $12.6-12.9bn in May. It marked the second cost hike this year and is significantly higher than the original estimate of $8.9bn given in October 2014.
The company warned last month that the cost overruns, combined with narrower chemical margins, will weigh on its financial results. It expects its adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) to fall by 4pc-14pc in the 12 months to 30 June compared with a year earlier.
Sasol has not changed its guidance on costs or Ebitda. But it has revealed a delay to the start-up of the 1.5mn t/yr ethane cracker at Lake Charles. "The final stages of the ethane cracker start-up were initiated in July ... [but] a technical challenge relating to a large heat exchanger was encountered. As a result, the cracker start-up was interrupted for several days to resolve this issue," it said. The start-up process has now resumed and an update on when the cracker will become operational will be provided on or before 26 August, Sasol said.
