JSE-listed integrated energy and chemicals company Sasol has announced that it expects its earnings a share for the year ended June 30, to be more than 100% higher year-on-year, at between R7 and R12, compared with the loss a share of R69.94 reported for the 2024 financial year.

Headline earnings a share are expected to increase by between 85% and 100%, reaching between R33.60 and R36.30, compared with R18.19 in the prior year.

The company expects adjusted earnings before interest, taxes, depreciation and amortisation to decline by between 10% and 17%, to between R50-billion and R54-billion, compared with R60-billion in the prior year.

Sasol said the expected increase in earnings is supported by management actions and driven by higher average chemicals basket prices and strict cost control; significantly lower impairments of R20.7-billion before tax compared with R74.9-billion in the prior year, the derecognition of a deferred tax asset of R15.3-billion in the prior year relating mainly to assessed loss carry forwards on Chemicals America operations; a R4.3-billion net cash settlement from Transnet before tax; and a R2.9-billion reduction in the asset rehabilitation provision in the current year compared with an R800-million reduction in the prior year.

The company said the expected increase in earnings is partially offset by a 15% decline in the average rand-per-barrel Brent crude oil price, a significant decline in refining margins and fuel price differentials, a 3% decrease in sales volumes linked to lower production and market demand, as detailed in its production and sales metrics report published on July 22, and lower unrealised gains of R2-billion on the translation of monetary assets and liabilities and the valuation of financial instruments and derivative contracts compared with unrealised gains of R4.7-billion in the prior year.

Sasol said significant impairments and impairment reversals in the current year included the Secunda and Sasolburg liquid fuels refinery cash-generating units (CGUs), which remain fully impaired.

The company said the recoverable amount had improved through management actions but was negatively affected by lower forecast macroeconomic assumptions, and that further management initiatives were needed before benefits could be reflected in impairment calculations. Costs capitalised during the year amounting to R13.1-billion hadbeen impaired.

The company has impaired its production sharing agreement (PSA) and PT5-C exploration assets in Mozambique by R4.4-billion, which it said was driven by an increased weighted average cost of capital attributable to a higher independently calculated country risk premium.

The PSA was also impacted by a marginal reduction in estimated gas volumes and lower sales prices for oil-related products.

Sasol has also impaired its Italy Care Chemicals CGU by R3.2-billion, citing lower-for-longer forecast sales margins, and said the CGU was now fully impaired. The company also reported a reversal of impairment of R1-billion for its China Care Chemicals CGU, following a sustained improvement in the business results.

Sasol will present its 2025 financial results on August 25.