Sasol Surges on Return to Profit and Carbon Credit Expansion

Sasol, a South African petrochemical company, reported a return to annual profit with tighter cost controls and fewer asset writedowns. The company rose 7% in premarket trading. Sasol is also increasing carbon credit purchases as it expands into coal and renewable energy.

South African petrochemical giant Sasol Ltd (SOLJ.J) reported a return to annual profit in its latest earnings, with higher chemical prices, tighter cost controls, and lower asset writedowns driving the improvement. The company posted basic earnings per share of 10.60 rand ($0.6070) for the year ended June 30, compared to a loss of 69.94 rand per share in the previous year [1].

The company's performance was bolstered by a 4.3 billion rand payout from Transnet, following a legal suit alleging overcharging for oil transportation [2]. Despite a 9% decrease in turnover due to lower sales volumes and reductions in rand oil prices and refining margins, Sasol managed to keep cash fixed cost increases below inflation and reduce capital expenditure by 16% year-on-year [2].

Sasol also recorded significantly lower impairments of 20.7 billion rand compared to 74.9 billion rand in the previous year, with most of the writedowns related to its Secunda and Sasolburg liquid fuels refinery operations, Mozambique gas production sharing agreement, and Italian chemicals business [2]. The company skipped dividend payments as its net debt of $3.7 billion remained above the $3 billion threshold set by its dividend policy [1].

Additionally, Sasol is increasing its carbon credit purchases, with a year-on-year rise to 723 million rand, as it expands into coal and renewable energy [3]. The company is working to offset its environmental impact by expanding renewable power generation while seeking to increase production of its core products at the Secunda hub [3].

Sasol's stock rose 7% in premarket trading following the announcement [4]. The company expects over 20% earnings per share (EPS) growth for FY25, on track to meet its financial targets [3].

References:
[1] https://www.reuters.com/business/energy/sasol-swings-profit-higher-chemical-prices-lower-writedowns-2025-08-25/
[2] https://www.marketscreener.com/news/sasol-swings-to-profit-on-higher-chemical-prices-lower-writedowns-ce7c50dbde8ef626
[3] https://seekingalpha.com/news/4488622-sasol-boosts-carbon-credit-buys-amid-coal-expansion-renewable-push
[4] https://www.stocktitan.net/news/SASOF/