South African petrochemicals group Sasol reported an annual loss on Monday, hit by a writedown of 111.6 billion rand ($6.43 billion) and a drop in oil and chemical prices due to the coronavirus outbreak.
The world’s top producer of motor fuel from coal reported a loss of 91.3 billion rand for the full year ended June 30, compared with earnings of 6.1 billion rand in the prior year.
But core headline earnings per share, the primary profit gauge in South Africa that strips out certain once-off items, fell 61% to 14.70 rand ($0.85) for the year from 37.65 rand a year earlier.
Sasol said earnings were severely impacted by a collapse in oil prices and the economic impact of Covid-19 in the second half of the year despite good production and higher oil prices in the first half of the year.
The company said it recorded impairments of 111.6 billion rand, with 72.6 billion rand related to its base chemicals business and 38.8 billion rand related to other assets mainly in South Africa.
Earnings were further impacted by 3.9 billion rand in depreciation charges and 6.0 billion rand in finance charges for the year as its Lake Charles Chemicals project (LCCP) units reached beneficial operation, Sasol said.
Investors have been concerned by the company’s debt, largely due to delays and cost overruns at LCCP in Louisiana, that forced its former joint chief executive officers to resign in a bid to restore shareholder confidence.
Sasol said total debt for the year stood at 189.7 billion rand, compared with 130.9 billion rand a year earlier.
The petrochemical firm said it would continue to suspend dividends to protect liquidity amid ongoing economic uncertainty.