Sasol Forecasts Significant Earnings Decline for H1 2026, Citing Lower Oil/Chemical Prices and R7.8B Impairments

summarizeSummary

Sasol expects a substantial decrease in half-year earnings per share (EPS down 89-99%) and headline earnings per share (HEPS down 29-40%) for the period ended December 31, 2025, primarily due to lower commodity prices and significant impairments.

check_boxKey Events

• Projected Earnings Decline

  Sasol anticipates Earnings Per Share (EPS) to decrease by 89-99% and Headline Earnings Per Share (HEPS) by 29-40% for the six months ended December 31, 2025, compared to the prior period.

• Significant Impairments Recorded

  The company expects to record R7.8 billion in impairments, including R3 billion for the Secunda liquid fuels refinery and R3.9 billion for a Mozambique Production Sharing Agreement (PSA) development.

• Commodity Price Headwinds

  The earnings decline is primarily attributed to a 1% drop in average Brent crude oil prices and a 3% decrease in the average chemicals basket price.

• Improved Free Cash Flow Expected

  Despite lower earnings, free cash flow generation is expected to improve due to disciplined cost management and lower capital expenditure.

auto_awesomeAnalysis

The trading statement reveals a challenging financial period for Sasol, with a dramatic reduction in profitability driven by declining Brent crude oil and chemicals basket prices. The company also recorded substantial impairments totaling R7.8 billion, including R3 billion for the Secunda liquid fuels refinery and R3.9 billion for a Mozambique PSA development. While operational performance improved and free cash flow is expected to rise due to lower capital expenditure, the significant drop in earnings per share and headline earnings per share indicates considerable headwinds. Investors will closely monitor the full interim results on February 23, 2026, for further details and management's outlook.