Sasol Limited (SSL) Q4 2025 Earnings Call Transcript
Adjusted EBITDA Adjusted EBITDA for the period was down 14% to ZAR 52 billion. The decline was due to lower production volumes and operational setbacks, as well as a challenging macroeconomic environment.
Free Cash Flow Free cash flow increased to almost ZAR 12.6 billion, a 75% improvement compared to the prior year. This was driven by disciplined capital spend, lower tax payments, and the receipt of the Transnet legal settlement. Even after normalizing for the Transnet legal settlement, free cash flow increased by more than 30%.
Net Debt Net debt, excluding leases, ended the year at USD 3.7 billion, which is 8% lower than the target of USD 4 billion. This reduction was achieved through disciplined financial management and improved free cash flow.
Capital Expenditure Capital expenditure was ZAR 25 billion, 13% lower than the target of ZAR 28 billion to ZAR 29 billion. This reduction was due to lower feedstock replacement, compliance spend, and discretionary sustenance spend, while maintaining safety and asset integrity.
Gross Margin Gross margin declined by 12%, mainly due to a 9% reduction in turnover as a result of a lower rand oil price and a 3% decrease in sales volumes associated with lower production and weaker market demand.
Net Working Capital Net working capital as a percentage of turnover on a 12-month rolling basis was 16.8%, slightly above the target of 15.5% to 16.5%. This was due to lower rolling turnover and an increase in inventory to manage supply variability during the year.
International Chemicals Adjusted EBITDA Adjusted EBITDA for International Chemicals increased to $411 million, with an improvement in adjusted EBITDA margin from 6% to 9%. This was driven by improved U.S. ethylene margins, stronger palm kernel oil pricing, and strategic reset initiatives.
Social Investment Sasol invested ZAR 600 million in social programs, including ZAR 150 million in community infrastructure projects globally. This investment supported more than 250 students with bursaries and created 3,000 jobs, contributing to local economic development.
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- Revenue Beat: Strategy reported fourth-quarter revenue of $122.99 million after Thursday's close, surpassing analyst expectations of $118.48 million, indicating strong market performance that may attract more investor interest.
- Earnings Growth: The company posted adjusted earnings of $16.37 per share, exceeding analyst estimates of $10.96 per share, demonstrating significant improvement in profitability that could lay the groundwork for future growth.
- Stock Price Decline: Despite the revenue and earnings beats, Strategy's stock dipped 4.8% to $128.36 in pre-market trading, reflecting market concerns about the overall economic environment, which may impact investor confidence.
- Market Trends: U.S. stock futures were lower, with Nasdaq 100 futures falling around 100 points, indicating cautious market sentiment that could pressure tech stocks and influence overall investment strategies.
- Earnings Surprise: Eagle Bancorp reported Q4 earnings of $0.25 per share, surpassing the analyst consensus estimate of a $0.10 loss, indicating a significant improvement in profitability that boosts investor confidence.
- Sales Growth: The company achieved quarterly sales of $68.303 million, exceeding the analyst consensus of $67.033 million, demonstrating strong market demand and promising future growth potential.
- Stock Surge: Eagle Bancorp's shares jumped 19.8% to $28.80 during Thursday's session, reflecting a positive market reaction to its financial performance, which may attract more investor interest.
- Strong Market Performance: Following Eagle Bancorp's results, the overall market performed well with the S&P 500 rising, indicating investor optimism about economic recovery, further driving stock market gains.
- Fuel Sales Forecast Upgrade: Sasol has revised its FY26 fuel sales forecast from 0-3% to 5-10% growth, driven by improved Natref performance, resulting in a 6% increase in premarket share trading.
- Gas Production Downgrade: The company has adjusted its gas production forecast down from 0-10% above FY25 to 0-5% below FY25 due to delays in PSA and CTT, as well as reduced internal and external demand, indicating market softness.
- South Africa Operations Milestone: The destoning plant in South Africa achieved beneficial operation in December 2025, marking a significant milestone in coal quality improvement, which is expected to enhance future production efficiency.
- Soft Chemical Market Conditions: While sales volumes in Chemicals Africa increased compared to the previous quarter, overall chemical market conditions remained soft, leading to lower revenues, highlighting challenges faced by the industry.
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- Earnings Beat: Despite the revenue miss, J.B. Hunt's earnings per share came in at $1.90, exceeding analyst expectations of $1.77, suggesting effective cost control measures by the company.
- Stock Price Movement: Following the earnings report, J.B. Hunt's shares fell 4.2% in pre-market trading to $197.86, reflecting investor disappointment over the revenue shortfall.
- Market Dynamics: Other companies like TryHard Holdings and High Roller Technologies also experienced significant pre-market fluctuations, with TryHard's shares dropping 16.4% due to a cooperation announcement, while High Roller saw a 12.9% decline after signing a letter of intent.
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