JSE-listed Sasol has warned that its earnings for the six months ended December 31, 2025, are expected to fall sharply, with earnings per share (EPS) projected to decline by between 89% and 99% year-on-year, largely owing to weaker commodity prices and significant asset impairments.

In a trading statement published on February 5, the company said EPS are expected to be between 10c and 80c, down from the EPS of R7.22 reported for the six months ended December 2024.

Headline earnings a share are forecast to be between R8.50 and R10, compared with the R14.13 reported for the prior comparable period, representing a decrease of between 29% and 40%.

Adjusted earnings before interest, taxes, depreciation and amortisation are expected to be between R19-billion and R23-billion, down from R24-billion in the prior period, a decline of between 4% and 21%.

Sasol said the drop in earnings was mainly driven by a 17% decline in the average rand per barrel Brent crude oil price and a 3% decrease in the average dollar-per-ton chemicals basket price, as well as impairments totalling R7.8-billion before tax, compared with R5.7-billion in the prior period.

The company reported that the Secunda liquid fuels refinery cash generating unit remains fully impaired, with the full amount of R3-billion in costs capitalised during the current period written down.

In addition, an impairment of R3.9-billion was recognised on the production sharing agreement development in Mozambique. Sasol said that, while the total volume of gas associated with the project remains unchanged, a revision to the expected production profile has deferred gas monetisation, with the strengthening of the rand against the dollar also contributing to the impairment.

The decline in earnings was partially offset by operational improvements. Sasol said refining margins increased by more than 100% following improved fuel differentials, while sales volumes rose by 3%, supported by improved operational performance. The company also cited cost reductions achieved through cost management efforts.

Despite lower earnings, the company said its overall free cash flow generation is expected to improve compared with the prior period, owing to lower capital expenditure.

Sasol is scheduled to present its 2026 interim financial results on February 23.