Staff Writer
Sasol Limited has warned shareholders to expect a sharp drop in earnings for the six months ended 31 December 2025, citing weaker commodity prices and higher impairments. The impact was partly offset by operational improvements and cost control.
In a trading statement, Sasol said earnings per share are expected to fall to between 10 cents and 80 cents, from R7.22 in the previous period. This represents a decline of between 89% and 99%. Headline earnings per share are forecast at between R8.50 and R10.00, down from R14.13, a decrease of between 29% and 40%.
Adjusted earnings before interest, tax, depreciation and amortisation are expected to range between R19 billion and R23 billion, compared with R24 billion in the prior period. This reflects a decline of between 4% and 21%.
Sasol said the drop in earnings was mainly driven by a 17% fall in the average Rand-per-barrel Brent crude oil price, a 3% decline in the average US dollar per tonne chemicals basket price, and higher impairments of R7.8 billion before tax. In the prior period, impairments amounted to R5.7 billion.
The group said lower commodity prices reduced profitability across its energy and chemicals businesses. Foreign exchange movements, including a stronger rand against the US dollar, also contributed to the impairment charges.
These factors were partly offset by operational gains. Sasol reported that refining margins more than doubled, supported by improved fuel differentials. Sales volumes rose by 3%, driven by better operational performance across the business, as outlined in its Business Performance Metrics released on 22 January 2026. Cost management efforts also helped lower operating costs.
Despite the expected earnings decline, Sasol said free cash flow is likely to improve compared to the prior period. The improvement is mainly due to lower capital expenditure.
The group reported that the Secunda liquid fuels refinery cash-generating unit remains fully impaired, with R3 billion in capitalised costs written down during the period. Sasol also recorded a R3.9 billion impairment linked to its production sharing agreement development in Mozambique. The group said the gas resource remains unchanged, but changes to the expected production profile have delayed gas monetisation. The stronger rand also contributed to the impairment.
Sasol said the financial information in the trading statement has not been reviewed or reported on by its external auditors.
The group is expected to release its interim results for the 2026 financial year on 23 February.
