- Headline earnings down 34% to R5,7bn as Brent crude price declines 17%.
- R7,8bn in non-cash impairments recorded, with net debt at US$3,8bn.
Sasol has reported a 34% decline in headline earnings to R5,7bn for the six months ended 31 December 2025, reflecting continued pressure from softer macroeconomic conditions and lower global commodity prices.
Turnover remained flat at R122,4bn compared to the prior period, supported by a 3% increase in sales volumes. However, the group’s profitability was significantly impacted by a 17% decline in the average rand per barrel Brent crude oil price and weaker international chemical prices.
Headline earnings per share fell 34% to R9,27, while basic earnings per share declined 95% to R0,38. Adjusted EBITDA decreased 12% to R21,0bn and earnings before interest and tax dropped 52% to R4,6bn.
The group recorded R7,8bn in non cash impairments, primarily relating to a R3,0bn write down of the Secunda liquid fuels refinery, which remains fully impaired, and a R3,9bn impairment on gas development projects in Mozambique due to delayed monetisation.
Despite the earnings pressure, Sasol generated positive free cash flow of R0,8bn, representing an improvement of more than 100% compared to the prior period and marking the first positive half year free cash flow in four years. This was supported by a 43% reduction in capital expenditure to R8,5bn, lower cash fixed costs and improved production performance.
Secunda Operations increased production volumes by 10%, supported by the successful commissioning of a destoning plant, improved gasifier availability and the absence of a phase shutdown. The higher production, combined with disciplined cost management, contributed to a lower cash break even oil price.
Cash generated by operating activities declined 34% to R11,6bn, reflecting lower earnings. Liquidity remains robust at above US$4bn.
Total debt reduced to R93,5bn or US$5,6bn at period end, compared to R103,3bn at 30 June 2025. Net debt, excluding leases, stood at R63,3bn or US$3,8bn, representing a net debt to Adjusted EBITDA ratio of 1,6 times. As net debt remains above the US$3,0bn threshold, the company did not declare a dividend.
During the period, Sasol deposited R8,7bn or US$500m into its revolving credit facility, repaid R812m under its domestic medium term note programme and issued a floating rate bond of R5,3bn. The issuance supports diversification of the funding base and reduces US$ exposure.
In its International Chemicals business, market conditions were weaker than anticipated, with lower US ethylene margins and muted demand impacting performance. As a result, the company revised its International Chemicals Adjusted EBITDA guidance downward to between US$375m and US$450m, from a previous range of US$450m to US$550m.
The group has concluded its FY26 hedging programme and commenced its FY27 programme, utilising a broader range of instruments to manage downside risk amid continued volatility.
On the energy transition front, Sasol secured an additional 300MW of renewable energy capacity during the period, bringing total secured capacity in South Africa to more than 1,2GW. This forms part of its 2GW renewable energy target by 2030 and supports both emissions reduction and cost optimisation objectives.
Management indicated that priorities remain focused on safe and reliable operations, disciplined capital allocation, proactive risk management and sustained cash generation to strengthen balance sheet resilience and deliver long term shareholder value.
Author: Bryan Groenendaal
