EDITORIAL: Sasol’s history-making financial disaster
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Adherents of the private sector efficiency theory will have been startled to read that the bungling engineers at Sasol turned in an epic R91.3bn loss for the year to March. It not only exceeds SA’s entire loan from the International Monetary Fund and African Development Bank, it leaves state-owned basket cases like PetroSA in the shade.
At the heart of Sasol’s loss lies an R111bn impairment, R73bn of which relates to its Lake Charles project in the US. It was billed as Sasol’s future, but it almost ended up being its end.
Sure, it’s bad luck that this coincided with the oil price falling through the floor, and the pandemic-inspired loss of demand for its products. But that’s life.
The fact is, this mess is Sasol’s own making: it failed to manage its risk, and it ruined investor sentiment by missing its deadlines for Lake Charles — this was the seed for today’s loss. That it overpaid former joint CEOs Bongani Nqwababa and Stephen Cornell, who oversaw the disaster, makes the taste all the more sour. Many others just as culpable should thank their stars they still have a job.
In the FM this week, CEO Fleetwood Grobler says Sasol now has "one chance" for a reset — "we need to do it now".
He’s not wrong. It’s only due to SA’s world-class investor apathy that so many remain invested in Sasol after this history-making financial disaster.
At the heart of Sasol’s loss lies an R111bn impairment, R73bn of which relates to its Lake Charles project in the US. It was billed as Sasol’s future, but it almost ended up being its end.
Sure, it’s bad luck that this coincided with the oil price falling through the floor, and the pandemic-inspired loss of demand for its products. But that’s life.
The fact is, this mess is Sasol’s own making: it failed to manage its risk, and it ruined investor sentiment by missing its deadlines for Lake Charles — this was the seed for today’s loss. That it overpaid former joint CEOs Bongani Nqwababa and Stephen Cornell, who oversaw the disaster, makes the taste all the more sour. Many others just as culpable should thank their stars they still have a job.
In the FM this week, CEO Fleetwood Grobler says Sasol now has "one chance" for a reset — "we need to do it now".
He’s not wrong. It’s only due to SA’s world-class investor apathy that so many remain invested in Sasol after this history-making financial disaster.
