Governance concerns as Sasol results delayed again
A further delay in the release of Sasol’s year-end results indicates greater management and governance risk, and suggests potential disclosure restatements in last year’s financial statements, says S&P Global Ratings.
The company rates Sasol (BBB-/Stable/A-3) two notches above South Africa (BB/Stable/B).
The release of Sasol’s 2019 financial year results was initially delayed from August 19 to September 19, and was later delayed again until October.
Further InvestigtionThe further delay follows the board’s decision to commission additional work and give time for further investigation into particular points raised in the original board-commissioned independent review of recent cost and schedule changes for the Lake Charles chemicals project (LCCP).
The investigation began after Sasol announced further increases in May to the capital cost estimate. A preliminary report was submitted to the board on August 14.
The additional investigation includes assessing if any potential control weakness identified in the preliminary report and the root cause for the changes in the cost and schedule estimate were present in the previous fiscal year.
In the August and September announcements, Sasol said it expected no change to the earnings guidance in the trading statement of July 25, and also confirmed its previous LCCP capital cost guidance of $12.6-billion to $12.9-billion.
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