Sasol has cut its core earnings expectations from the Lake Charles Chemicals Project (LCCP) following a drop in oil and chemicals prices and lower global demand due to the spread of the coronavirus.
As Reuters reports, it expects a loss in earnings before interest, taxes, depreciation, and amortisation (EBITDA) from LCCP of $50 million to $100 million for the financial year versus previous guidance of a profit of up to $100 million.
The project was 99% complete and capital expenditure amounted to $12.6 billion, according to Sasol.
To protect its balance sheet, the struggling petrochemical giant has cut management salaries by 10% to 20% and no salary increases are planned this year. Group CEO Fleetwood Grobler is donating 33% of his salary to the country’s Solidarity Fund for three months. This will be followed by a further 20% pay cut for the next five months.
“Salary sacrifices are planned for eight months, however the duration of the temporary measures will be reassessed against the progress we make towards our savings targets,” Sasol said in a shareholder update. “These measures are necessary to help protect the company’s balance sheet and liquidity until at least the end of financial year 2021.”