Shares of Sasol (SSL), the South African chemicals-and-energy group, surged 8.42% in Monday's trading session following the company's announcement of a return to profitability for fiscal 2025. The impressive turnaround came despite facing a challenging business environment, demonstrating the company's resilience and effective management strategies.
According to Sasol's latest financial report, the company posted earnings per share of 10.60 South African rand (61 cents) for the year ended June 30, marking a significant improvement from the loss of 69.94 rand per share in the previous year. Headline earnings per share, a key profit measure in South Africa, also showed substantial growth, rising to 35.13 rand from 18.19 rand. This dramatic shift to profitability appears to be the primary driver behind the stock's surge.
While Sasol's turnover decreased by 9% to 249.10 billion rand, reflecting lower oil prices and reduced sales volumes, the company made substantial improvements in other areas. Total impairments fell dramatically to 20.7 billion rand from 74.9 billion rand in the prior year, and free cash flow improved by 75%, aided by cost-management initiatives and a favorable legal settlement. CEO Simon Baloyi acknowledged the complex and volatile global environment but emphasized the company's progress on strategic initiatives to restore value and drive growth. However, investors should note that Sasol will not pay a final dividend for fiscal 2025 due to its debt level of $3.7 billion, which remains above the company's sustainability threshold.
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