Sasol Reports 75% Increase in Free Cash Flow, 9% Decline in Turnover for FY25

Sasol Limited's audited financial results for the year ended June 30, 2025, show a 75% increase in free cash flow to R12.6 billion and a 93% surge in headline earnings per share to R35.13. However, turnover declined by 9% to R249 billion and adjusted EBITDA dropped 14% to R51.8 billion due to lower Rand oil prices and refining margins. Impairments reduced significantly to R20.7 billion, and no dividend was declared due to net debt exceeding the US$3 billion threshold.

Sasol Limited's audited financial results for the year ended June 30, 2025, highlight a significant improvement in financial performance, despite a challenging macroeconomic environment. The company reported a 75% increase in free cash flow to R12.6 billion and a 93% surge in headline earnings per share (HEPS) to R35.13 [1]. However, turnover declined by 9% to R249 billion, and adjusted EBITDA dropped 14% to R51.8 billion due to lower Rand oil prices and refining margins.

The company's strategic initiatives, aimed at reshaping Sasol for the future, have shown encouraging progress. Free cash flow after tax, interest, and capital expenditure increased by 75% to R12.6 billion. Earnings (pre-tax) were supported by non-recurring items, including the Transnet net cash settlement of R4.3 billion and the reduction in the environmental rehabilitation provision of R2.9 billion. These improvements were offset by lower unrealised gains of R2 billion from the translation of monetary assets and liabilities and revaluation of derivatives [1].

Despite the improvements, the company faced several headwinds. A 15% decline in the Rand oil price, significant reductions in refining margins, and fuel price differentials, along with a 3% lower sales volume, resulted in a 9% decrease in turnover. Adjusted EBITDA declined by 14% to R51.8 billion. The company's disciplined cost and capital management helped contain cash fixed cost increases below inflation, while capital expenditure of R25.4 billion was 16% lower than the prior year. Total impairments reduced significantly to R20.7 billion, with R13 billion related to the Secunda and Sasolburg liquid fuel refinery cash generating units (CGUs) remaining fully impaired [1].

Sasol's balance sheet was strengthened due to strong free cash flow generation supported by the impact of non-recurring items such as the Transnet settlement. Net debt (excluding leases) declined by 13% to R65.0 billion (US$3.7 billion), while total long-term debt reduced by 12% to R103.3 billion (US$5.8 billion). The company also enhanced its liquidity through the successful closure of a R5.3 billion ZAR floating rate bond in July 2025 [1].

Despite the positive financial performance, no dividend was declared by the Sasol Limited board of directors due to net debt exceeding the US$3 billion threshold. The company's dividend policy is based on 30% of free cash flow generated provided that net debt (excluding leases) is sustainably below US$3 billion [1].

Sasol will present its 2025 financial results on Monday, August 25, 2025, at 09h00 (SA time), followed by a market call to address questions. Investors are encouraged to connect to the call via the webcast link, https://www.corpcam.com/Sasol25082025, or via teleconference call link, https://services.choruscall.eu/DiamondPassRegistration/register?confirmationNumber=3605690&linkSecurityString=89ae33f44. A recording of the presentation will be available on the company's website thereafter [1].

References:
[1] https://www.prnewswire.com/news-releases/sasol-limited-audited-financial-results-for-the-year-ended-30-june-2025-302537567.html