Sasol Reports H1 FY26 Results Amid Challenging Market Conditions
Johannesburg, South Africa – Sasol Limited (JSE: SOL; NYSE: SSL) has released its operating and financial results for the six months ended 31 December 2025 (H1 FY26). Despite a volatile macroeconomic environment, the company has made steady progress in executing its strategic objectives.
“Implementation of our strategic initiatives from the Capital Markets Day plan is progressing consistently, strengthening our foundation business, mitigating global market volatility, and building resilience for the future,” said Simon Baloyi, President and Chief Executive Officer of Sasol Limited.
Safety and Operational Performance
Safety remains a top priority for Sasol. Tragically, the company lost a team member in September 2025. While this loss is deeply felt, improvements in key safety indicators indicate progress toward a stronger safety culture.
In Southern Africa, a significant milestone was achieved in December 2025 when the destoning plant at Sasol Mining reached beneficial operation. This improved coal quality, combined with higher gasifier availability and the absence of a phase shutdown, led to a 10% increase in production volumes at Secunda Operations (SO). Strong cost and capital discipline further supported a lower cash break-even oil price.
Internationally, the chemicals reset strategy continues, though market conditions were weaker than expected. Lower US ethylene margins and muted demand affected performance, but cost reduction efforts supported a 10% increase in Adjusted EBITDA in US dollar terms.
The Group generated positive free cash flow for the first time in four years, driven by higher sales volumes, lower cash fixed costs, and reduced capital expenditure, all without compromising asset integrity or safety.
Grow and Transform Strategy
Sasol continues to advance its Grow and Transform strategy. The company secured an additional 300 megawatts (MW) of renewable energy, raising total secured capacity in South Africa to over 1,200 MW. This supports emission reductions and cost efficiencies, reinforcing Sasol’s commitment to sustainability.
“Our priorities remain clear: safe and reliable operations, disciplined cost and capital management, proactive risk mitigation, and improved cash generation. Consistent execution in these areas strengthens resilience and positions Sasol to deliver sustainable shareholder value,” Baloyi added.
Financial Performance
Despite macroeconomic pressures, Sasol progressed on factors within its control. Lower cost and capital expenditure contributed to positive free cash flow.
- Adjusted EBITDA decreased 12% to R21,0 billion, primarily due to a 17% decline in the average Rand per barrel Brent crude price and lower US dollar per ton chemicals basket prices. These declines were partially offset by improved refining margins, a 3% increase in sales volumes, and lower cash fixed costs.
- Earnings before interest and tax (EBIT) fell 52% to R4,6 billion, impacted by non-cash remeasurement items of R7,9 billion, including impairments of R7,8 billion related to the Secunda liquid fuels refinery CGU and the Mozambican Production Sharing Agreement (PSA) gas development.
- Basic earnings per share (EPS) decreased 95% to R0,38, while HEPS declined 34% to R9,27.
Cash generated from operations declined 34% to R11,6 billion, reflecting the lower earnings, while capital expenditure of R8,5 billion was 43% lower than the prior period due to no Secunda shutdown, reduced PSA project expenditure in Mozambique, and near completion of environmental compliance projects. Free cash flow increased to R0,8 billion, more than doubling from the prior period.
Balance Sheet and Liquidity
Sasol maintains a strong balance sheet with liquidity above US$4 billion. Total debt decreased to R93,5 billion (US$5,6 billion) from R103,3 billion (US$5,8 billion) at 30 June 2025.
Key debt activities included:
- Depositing R8,7 billion (US$500 million) into the revolving credit facility.
- Repaying R812 million on the DMTN.
- Issuing a floating rate bond of R5,3 billion, receiving US$300 million, diversifying the funding base, reducing US dollar debt exposure, and lowering financing costs.
Net debt (excluding leases) ended at R63,3 billion (US$3,8 billion), compared to R65,0 billion (US$3,7 billion) in June 2025. Cash generation remains a priority to meet the full-year net debt target of below US$3,7 billion.
Hedging and Risk Management
Sasol continues to execute a comprehensive hedging strategy to manage downside risk. The FY26 programme is complete, and the FY27 programme is underway. Foreign exchange translation losses were largely offset by gains on derivative instruments, and a broader range of hedging instruments is being used to maintain protection in volatile market conditions.
Source Link: https://www.sasol.com/
