What Happened
South African energy and chemicals giant Sasol has reported a dramatic 95% decline in basic earnings per share for the six months ending December 31, 2025. Despite a steady turnover of R122.4 billion, the company has faced significant financial strain due to a challenging macro environment and substantial asset writedowns. The primary cause of this earnings collapse was a series of non-cash remeasurement items totaling R7.9 billion, including a R7.8 billion impairment related to the Secunda liquid fuels refinery and gas development projects in Mozambique.
Why It Matters
The financial downturn has severely impacted Sasol’s profitability, with earnings before interest and tax (Ebit) plummeting 52% to R4.6 billion, down from R9.5 billion in the previous period. Headline earnings per share also fell by 34% to R9.27. Although the company generated positive free cash flow of R0.8 billion for the first time in four years, it has opted not to declare an interim dividend due to high debt levels, which stood at R63.3 billion at the end of December 2025.
What’s Next
Looking ahead, Sasol is focusing on implementing strategic initiatives to strengthen its foundation business and mitigate ongoing global market volatility. The company aims to advance its Grow and Transform strategy while addressing the financial challenges posed by its international operations, particularly the Lake Charles Chemical Project in the United States, which has been a significant financial burden. As Sasol navigates these challenges, its commitment to safety and operational improvements remains a priority.
