Sasol Limited Reports Huge Growth Expectations for EPS
Overview of Sasol Limited's Trading Statement
Sasol Limited has recently provided an update on its earnings expectations, indicating a remarkable increase in earnings per share (EPS) for the year ended June 30, 2025. This trading statement reflects strong performance despite ongoing market challenges and showcases Sasol's strategic management efforts.
Earnings Expectations
The company has announced that its EPS is anticipated to rise by more than 100%, reaching between R7.00 and R12.00, a substantial recovery from a prior year loss of R69.94 per share. Similarly, headline earnings per share (HEPS) are projected to increase by 85% to 100%, ranging from R33.60 to R36.30, compared to R18.19 last year.
Factors Contributing to Increased Earnings
Sasol's growth can be attributed to several strategic actions taken by its management. Key contributors include:
- Enhanced chemicals basket prices coupled with diligent cost management.
- Significantly reduced impairments of R20.7 billion before tax, compared to R74.9 billion the previous year.
- Derecognition of a deferred tax asset of R15.3 billion linked to an assessed loss carryforward from operations.
- A net cash settlement of R4.3 billion from Transnet SOC Limited.
- Reductions in asset rehabilitation provisions, showing strong fiscal discipline.
Challenges Faced
Despite the positive outlook, Sasol has faced some offsetting challenges. Factors that have restrained higher earnings include:
- A 15% drop in the average Rand per barrel of Brent crude oil.
- A decline in sales volumes approximately by 3% due to lower market demand.
- Lower unrealised gains on the translation of financial assets and liabilities, which significantly impacted overall performance.
Details of Impairments and Reversals
The trading statement outlines substantial impairments for the year, which included:
- Full impairment of cash-generating units at the Secunda and Sasolburg liquid fuels refineries, which experienced a downturn due to lower economic forecasts.
- An impairment on the Production Sharing Agreement and exploration assets in Mozambique, led by increased country risk evaluations.
- Impairment of the Italy Care Chemicals cash-generating unit, resulting from prolonged reduced sales margins.
- A reversal of impairment benefits for the China Care Chemicals unit, driven by improved business conditions.
Future Projections
Looking ahead, Sasol will be presenting its financial results for 2025 soon, allowing stakeholders to get a deeper insight into the company's recovery and growth trajectory. The executive team, led by President and CEO Simon Baloyi and CFO Walt Bruns, will share detailed insights during a market call following the results announcement.
Connection for Investors
Investors seeking to connect during the presentation can do so through the webcast. This engagement is crucial for those who desire to understand Sasol's strategic direction and performance expectations further.
Contact Information
For more information regarding this trading update, interested parties can reach out to Sasol's Investor Relations office. Written inquiries can be directed to:
Tiffany Sydow, VP Investor Relations
Telephone: +27 (0) 71 673 1929
Email: investor.relations@sasol.com
Frequently Asked Questions
What is Sasol Limited's EPS expectation?
Sasol Limited expects its EPS to increase by more than 100%, ranging between R7.00 and R12.00 for the year ending June 30, 2025.
What supported the increase in earnings?
The increase was primarily due to better chemicals prices, cost control measures, significantly reduced impairments, and favorable cash settlements from third parties.
What are the challenges faced by Sasol?
Challenges include a drop in crude oil prices, a decrease in sales volumes, and lower unrealised gains contributing to restrained earnings growth.
When will Sasol release its financial results?
Sasol is scheduled to announce its 2025 financial results on August 25, 2025.
Who can investors contact for more information?
Investors can contact Tiffany Sydow, VP of Investor Relations, or email any inquiries to investor.relations@sasol.com.
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