JSE: SOL Breakout Point – Sasol Share Price Rally Reignites on Higher FY25 Guidance
Sasol’s remarkable turnaround shows no signs of slowing, as the company delivers results that surpass expectations and pushes through key ma
Quick overview
- Sasol Ltd. has shown a strong recovery, with its stock price jumping 11.09% following better-than-expected fiscal 2025 results.
- The company benefited from a significant R4.3 billion settlement with Transnet, although it also faced R20.7 billion in impairments.
- Despite projecting a decline in underlying EBITDA, Sasol's performance remains above analyst expectations due to effective cost-cutting and favorable commodity pricing.
- Investor sentiment has improved significantly, but the company's long-term growth will depend on maintaining profitability amid market volatility.
Sasol’s remarkable turnaround shows no signs of slowing, as the company delivers results that surpass expectations and pushes through key market resistance levels.
Recovery Picks Up Pace
After pausing briefly at the end of June, Sasol Ltd. (JSE: SOL) has resumed its powerful rebound, shrugging off oil market volatility and geopolitical uncertainty. On Tuesday, the stock jumped 11.09%, closing at 9,418 ZAC after gaining 940 ZAC intraday. The move followed the release of fiscal 2025 results that exceeded market forecasts, helped by significant one-off boosts such as an R4.3 billion settlement with Transnet.
Earnings Performance and Outlook
The Transnet settlement, along with other exceptional items, has provided a short-term lift to both EBITDA and HEPS. However, the company also recorded R20.7 billion in impairments, a reminder of ongoing challenges in its refining and gas divisions. Sasol’s latest guidance projects a decline in underlying EBITDA compared to last year’s highs, but performance remains comfortably ahead of analyst expectations due to cost-cutting measures, strategic settlements, and favorable commodity pricing in certain segments.
Technical Market Movements
From early April’s lows near 5,200 ZAC, Sasol’s share price has staged a dramatic rally, nearly doubling to a peak of 10,230 ZAC by June. This surge broke through multiple resistance points and moved above the 200-day simple moving average (SMA), which has since become a key support level.
SOLJ Chart Daily – The 200 SMA Held As Support
In late June, the price briefly dipped below the 200-day SMA before stabilizing around the 100-day SMA. The latest rebound has brought the stock back into strong upward momentum, though the 50-day SMA on the weekly chart still stands as a critical barrier before the trend can shift fully bullish.
SOLJ Chart Weekly – Buyers Need to break the 50 SMA for the Trend to Shift
Sasol Better-Than-Expected FY2025 Outlook
Guidance Highlights
EBITDA Outlook:
- Projected at R50–R54 billion (down 10–17% year-on-year).
- Above Bloomberg consensus of R46.7 billion and Morgan Stanley’s R50.2 billion estimate.
Headline EPS (HEPS):
- Expected at R33.60–R36.30, up 85%–100% from last year.
- Exceeds Bloomberg’s forecast (R28.63) and Visible Alpha’s (R27.92).
Key Earnings Drivers
One-off Gains:
- R4.3 billion Transnet settlement.
- R2.9 billion reduction in asset rehabilitation provisions
- R2 billion in unrealised translation & valuation gains (included in HEPS but excluded from EBITDA).
Operational Factors:
- Higher average chemicals basket prices.
- Stronger cost control measures.
- Impairments and Basic EPS Impact
- Basic EPS: Expected at R7–R12 (more than double year-on-year).
- Major Impairments (total R20.7 billion before tax):
- R13.1 billion – Secunda & Sasolburg liquid fuels refinery (fully impaired).
- R4.4 billion – Mozambique gas PSA & PT5-C exploration (higher WACC, lower gas volumes).
- R3.2 billion – Care Chemicals.
Investor Sentiment
The upbeat earnings and improving price action have shifted market sentiment decisively in Sasol’s favor. While short-term momentum looks secure, the company’s ability to sustain this growth over the medium to long term will depend on translating one-off gains into consistent profitability, all while navigating an unpredictable energy and chemicals market.
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