Gearing to fall sharply once Lake Charles project starts, Sasol insists

Energy and chemicals group Sasol expects its capital expenditure (capex) to rise to R75-billion in 2017 and its balance sheet gearing to increase to between 25% and 35%, following the upward revision to the budget of the Lake Charles Chemical Project (LCCP), in the US, to $11-billion, from an initial forecast of $8.9-billion. In their maiden results presentation, joint presidents and CEOs Bongani Nqwababa and Stephen Cornell indicated that Sasol’s 2017 capex estimate is an increase of R2-billion on previous guidance, and is largely attributable of the increased LCCP capital estimate and the impact of the weakening rand. Capex for 2018 is forecast to be R60-billion.