Sasol Posts Annual Profit in 2025 on Higher Chemical Prices and Tighter Cost Controls

After a turbulent year that saw Sasol report one of its heaviest losses in recent history, South Africa’s petrochemical giant has swung back into the black. The turnaround comes on the back of higher chemical prices, tighter cost management, and a dramatic drop in asset writedowns.

From Loss to Profit

For the year ended 30 June 2025, Sasol reported basic earnings per share of R10.60 ($0.6070) a stark contrast to the R69.94 loss per share recorded last year. Investors welcomed the rebound, boosted further by a R4.3 billion payout from Transnet after a long-running legal claim over overcharged oil transportation fees.

Despite this, the company’s turnover fell 9%, reflecting lower sales volumes and softer refining margins, as well as declines in rand oil prices.

Cost Discipline and Capital Management

Sasol kept fixed costs below inflation, demonstrating tighter operational control. Capital expenditure came in at R25.4 billion, down 16% from the previous year, reflecting a careful approach to investment in a challenging economic environment.

Significantly, asset writedowns plummeted to R20.7 billion, compared to R74.9 billion the previous year. The reductions were mainly linked to operations in Secunda and Sasolburg liquid fuels refineries, Mozambique gas projects, and the Italian chemicals business. Last year’s impairments were largely driven by struggling U.S. chemicals operations, affected by weak demand and low prices.

Dividends on Hold

Even with the improved performance, Sasol once again skipped dividend payments. The company’s net debt of $3.7 billion remains above its $3 billion cap, in line with its policy of withholding dividends until debt levels are reduced.

A Cautious Optimism

Analysts note that while the profit swing is encouraging, Sasol’s focus remains on debt reduction and operational stability rather than shareholder payouts. The company’s blend of higher chemical prices and disciplined cost management has laid a solid foundation, but external factors like global oil prices and chemical demand will continue to shape its recovery.

For a company that has weathered multi-billion-rand losses, the 2025 results offer a sign of cautious optimism, signalling that Sasol is navigating toward steadier financial ground.

{Source: MSN}

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