Sasol Shares Decline After FY2026 Earnings Guidance Misses Estimates

Shares of Sasol fell 2.5% in South Africa after the energy and chemicals giant released fiscal year 2026 guidance with a key earnings metric that disappointed investors. The company's forecast for headline earnings per share (HEPS) came in slightly below market consensus at its midpoint, weighing on sentiment despite a more optimistic projection for adjusted core profit.

Guidance Details

Sasol projected its fiscal 2026 results with mixed signals for the market. The company's guidance included:

• Headline Earnings Per Share (HEPS): A range of R36 to R40 per share. At the midpoint of R38, this is below the Bloomberg consensus of R39.53 and the Visible Alpha consensus of R39.50. This represents a year-over-year increase of 2% to 14%.
• Adjusted EBITDA: A range of R58 billion to R62 billion. The midpoint of R60 billion exceeds consensus estimates, which stood at R58.07 billion (Bloomberg) and R57.25 billion (Visible Alpha). This guidance implies year-over-year growth of 12% to 20%.

Underlying Factors and Headwinds

According to the company, earnings were supported by higher sales volumes and improved margins in its oil and refining businesses. However, these positive factors were partly negated by the strengthening of the South African rand against the U.S. dollar.

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A significant factor impacting the earnings outlook was a reported R1.1 billion unrealized loss on currency translation and derivatives in the second half of fiscal 2026. This marks a sharp reversal from the R2.9 billion unrealized gain reported in the first half of the year.

Market Perspective

Investors appear to be focusing on the weaker-than-expected HEPS guidance rather than the beat on adjusted EBITDA. According to analysts cited in the report, the market may be placing less emphasis on the adjusted EBITDA metric.

This skepticism reportedly stems from certain historical adjustments made by the company, such as changes to rehabilitation provisions in the first half of fiscal 2026. This context helps explain why the stronger core profit forecast failed to lift the company's shares.