Sasol (SOL) H2 2024 earnings summary

Executive summary

• Leadership implemented decisive actions to streamline operations, improve accountability, and focus on transformation and sustainable growth.

• Safety performance remains a concern, with five fatalities in FY24 despite lower hospitalization and lost workday rates.

• Sasol 2.0 transformation program delivered R16bn in cumulative EBITDA enhancements by FY24.

• Operational improvements in Q4 led to increased production and sales volumes, with the Mining Full Potential program nearing completion.

• Leadership changes include appointment of a new CFO effective September 2024.

Financial highlights

• Turnover declined 5% to R275.1bn; gross margin down 1%.

• Adjusted EBITDA fell 9% to R60bn; cash generated by operations down 19%.

• Free cash flow dropped 60% to R8.1bn; capital spend of R30bn, down 2% year-over-year.

• Loss before interest and tax driven by a ZAR 46 billion impairment in Chemicals America and major impairments totaling R75bn.

• Final dividend passed; updated policy links payout to free cash flow and net debt below $4bn.

Outlook and guidance

• FY25 priorities: safety, cash generation, customer centricity, and sustainability.

• Mining production targeted at 30–32 million tons; Mozambique gas up 0–5%; Chemicals Africa sales up 0–4%.

• EBITDA enhancement of R2–4bn expected in FY25 through cost and margin optimization.

• Capex for FY25 forecasted at ZAR 28–30bn, including ZAR 1bn for growth projects.

• International chemicals volumes to remain flat, with focus on margin improvement.