Sasol Ltd. shares fell the most in almost three weeks after the South African chemicals and fuel manufacturer forecast full-year profit will probably decline by a fifth as it takes measures to mitigate a depressed oil market.
Sasol earnings per share before one-time items are expected to drop by at least 20% in the 12 months through June, according to a statement distributed by the Johannesburg Stock Exchange. It outlined steps in March, including plans to conserve cash and a potential $2 billion rights offer, to offset the collapse in oil prices earlier this year.
The stock fell as much as 9.1%, the most since May 4, and was trading 7.9% down as of 1:10 p.m. in Johannesburg. The shares have slumped 75% this year, making Sasol the worst performer in an index tracking South Africa’s 40 biggest companies.
The company has endured a challenging period, including cost overruns and the mismanagement of its U.S. chemicals project at Lake Charles, Louisiana, which resulted in Sasol’s co-chief executive officers stepping down in October. Then crude slumped this year due to a price war between the world’s biggest oil producers and the coronavirus pandemic that curbed demand.
“Shareholders are advised that implementation of the response strategy is underway, the outcome of which may have a material effect on the price of the company’s securities,” Sasol said.
Results will be announced on Aug. 17.
Earnings per share are also expected to fall by at least 20% from the previous period, according to Sasol. Results “may be impacted further by adjustments resulting from the year-end closure process.”