Sasol Q1 Earnings Up 93%, Despite 9% Revenue Decline

Sasol (SSL) reports a 9% decline in FY turnover but a 93% increase in earnings, with headline earnings per share rising to R35.13. The positive earnings boost investor sentiment, with a 7% increase in share value in premarket trading. Wall Street analysts forecast a cautious stance, with an average target price of $5.41 and a 14.07% anticipated downside from the current trading price.

South African petrochemical firm Sasol Limited (SSL) has reported a mixed financial performance for the year ended June 30, 2025, with a 9% decline in turnover but a 93% increase in earnings. The company's headline earnings per share (HEPS) rose to R35.13, significantly improving from a loss of R69.94 in the previous year [1].

The positive earnings boost has had a notable impact on investor sentiment, with a 7% increase in share value in premarket trading. However, Wall Street analysts have adopted a cautious stance, forecasting an average target price of $5.41 and a 14.07% anticipated downside from the current trading price [2].

Sasol's financial performance was driven by higher chemical prices, lower impairments of R20.7 billion (compared to R74.9 billion in the prior year), and a R4.3 billion settlement from Transnet. These gains were partially offset by a 15% decline in average Rand per barrel oil prices and a 3% decrease in sales volumes [3].

The company's CEO and President, Simon Baloyi, highlighted the progress made in areas within its control, including margin realization, managing cash fixed costs, and optimizing capital spend. He also noted the company's commitment to deleveraging its balance sheet through free cash flow generation and disciplined capital allocation [2].

Despite the improved metrics, Sasol did not declare a dividend due to its net debt remaining above the US$3 billion threshold required by its dividend policy. The company's net debt excluding leases declined 13% to R65.0 billion, and free cash flow increased 75% to R12.6 billion [1].

The company's focus on sustainability and renewable energy was also emphasized, with progress made on the emission reduction roadmap and the commissioning of low-carbon boilers at Natref. Sasol's third renewable energy facility, the Damlaagte solar PV plant, came online in August 2025, contributing to the company's decarbonization efforts [2].

References:
[1] https://www.marketscreener.com/news/sasol-swings-to-profit-on-higher-chemical-prices-lower-writedowns-ce7c50dbde8ef626
[2] https://africannewsagency.com/sasol-reports-93-increase-in-headline-earnings-share-rise-over-10/
[3] https://www.stocktitan.net/news/SSL/