Sasol Records R3.9B Mozambique Project Impairment, Trades at 5.86x Forward P/E
H1 2026 earnings fell sharply year-over-year due to lower oil prices and currency headwinds, prompting a R3.9 billion impairment on its Mozambique gas project. The company reported positive free cash flow in Q2 and now trades at a forward P/E of 5.86, a steep discount to global energy peers.
1. H1 2026 Earnings Decline
Sasol’s H1 2026 profits dropped sharply year-over-year as weaker oil prices and adverse currency movements eroded margins, highlighting exposure to commodity cycles and emerging-market currencies.
2. R3.9 Billion Mozambique Impairment
The company took a R3.9 billion non-cash write-down on its Mozambique gas project driven by delayed monetization and currency translation effects, noting that the charge does not affect cash balances or long-term project viability.
3. Q2 Free Cash Flow and Valuation
In Q2, Sasol generated positive free cash flow, strengthening liquidity, while its shares now trade at a forward P/E of 5.86x—well below the average multiple for global energy peers, suggesting potential undervaluation.