Sasol Reports 31% Profit Drop, But SOL Price Shows Signs of Recovery in 2025

Sasol Limited (JSE: SOL), one of South Africa’s energy and chemicals giants, is navigating through a challenging period. For the half-year ending December 2024, Sasol reported a 31% drop in profits, citing weaker oil prices and softer sales volumes.

To conserve cash amid these headwinds, the company withheld its dividend payout, reporting a negative free cash flow of 1.1 billion rand and a net debt of $4.3 billion—well above its preferred capital thresholds.

Despite these challenges, Sasol’s stock price is showing early signs of stabilization in 2025.

As of April 2025, Sasol Ltd (SOL) is trading around 6,567 ZAC, recovering from a sharp April selloff. Although the stock remains below the key 50% Fibonacci retracement level of 6,666 ZAC, its ability to defend support at 6,347 ZAC suggests resilience. Analysts believe that a breakout above 6,666 could pave the way for a move toward 6,987 and even 7,393 ZAC, highlighting cautious optimism among investors.

Strategic Measures to Counter Operational Hurdles

To adapt to market challenges, Sasol has made strategic operational adjustments:

• Coal Adjustments: Reduced coal production by 2 million tonnes while improving coal quality to boost gasifier efficiency.

• Environmental Compliance: Secured renewed Atmospheric Emissions Licenses at key sites like Secunda and Natref, supporting longer-term operations amid South Africa’s evolving carbon tax regime.

• Governance Focus: Appointed Ms. Elizna Viljoen as Group Company Secretary, strengthening corporate governance amid heightened financial pressures.

These efforts aim to position Sasol more competitively in a tightening regulatory and market environment.

Sasol’s Financial Discipline and Hedging Strategies

Looking ahead, Sasol remains committed to financial prudence:

• Capital Expenditure: Plans to invest between R28–R30 billion in FY25, prioritizing long-term value drivers.

• Oil Hedging: Locked in Brent crude prices at US$64 per barrel for FY25, helping shield cash flows from oil price volatility.

These moves reinforce Sasol’s intent to navigate uncertainty while preserving operational strength.

Sasol Ltd (SOL) Technical Outlook: Key Levels to Watch

Technically, Sasol Ltd (SOL) is in a mid-range consolidation phase. After a sharp April recovery, the stock faces stiff resistance around 6,666 ZAC. A confirmed breakout above this level could unlock upside potential toward:

• First target: 6,987 ZAC

• Second target: 7,393 ZAC

However, failure to hold above 6,347 ZAC could expose the stock to renewed selling pressure toward 5,949 ZAC.

Trade Setup for SOL:

• Buy Breakout: Above 6,666 ZAC

• Upside Targets: 6,987 and 7,393 ZAC

• Support to Watch: 6,347 ZAC

• Stop-Loss: Below 6,240 ZAC

Patience is essential—investors should wait for a decisive move before committing to new positions, given the risk of sideways price action near current levels.

Key Financial Metrics at a Glance:

• Half-year profit drop: 31%

• Free cash flow: -1.1 billion rand

• Net debt: $4.3 billion

• Share price (April 2025): 6,567 ZAC

• FY25 Capex Target: R28–R30 billion

Sasol’s combination of strategic discipline and tentative technical recovery could offer investors cautious optimism as 2025 progresses.