Sasol has reported a return to annual profitability, reversing steep losses from the previous year, as firmer chemical prices and lower asset impairments lifted earnings. The company posted basic earnings per share of 10.60 rand for the year ended June 30, compared with a loss of 69.94 rand per share a year earlier, figures published by Reuters showed.
The turnaround came despite a 9% decline in turnover, driven by weaker oil prices in rand terms, lower sales volumes, and softer refining margins. Sasol managed to contain cost inflation while cutting capital expenditure by 16% to 25.4 billion rand, as reported in Reuters.
A further boost came from a 4.3 billion rand settlement with Transnet over alleged oil transport overcharging, while impairment charges dropped sharply to 20.7 billion rand, down from 74.9 billion rand previously. The reduced writedowns followed last year’s heavy impairments on U.S. operations, with the latest charges focused on South Africa, Mozambique, and Italy, CNBC Africa indicated.
Despite the earnings recovery, Sasol chose not to declare a dividend, citing net debt of $3.7 billion, which remains above the $3 billion ceiling set in its dividend policy. Analysts noted that debt reduction continues to take precedence over shareholder payouts.
