Sasol (SOL) H1 2026 earnings summary

Executive summary

• Positive free cash flow was delivered for the first time in four years, supported by operational improvements, cost control, and disciplined capital allocation, despite challenging macroeconomic conditions and pricing pressures.

• Strategy remains focused on strengthening the foundation business, advancing transformation, expanding renewables, and emissions reduction initiatives.

• Safety remains a top priority, with improvements in leading indicators but a fatality in September 2025 prompting renewed initiatives.

• No interim dividend declared as net debt (excluding leases) exceeded the $3 billion threshold.

Financial highlights

• Adjusted EBITDA declined 12% year-on-year to R21 billion, with International Chemicals up 10% year-on-year.

• Net debt (excluding leases) ended at $3.8 billion (R63.3 billion), with a target to reduce it below $3.7 billion.

• Gross margin declined to 42% from 45% due to lower oil and chemical prices.

• EBIT decreased by 52% to R4.6 billion, mainly due to non-cash impairments totaling R7.8 billion.

• Capital expenditure was R8.5 billion, down 43% year-on-year, with full-year guidance revised to R22-24 billion.

Outlook and guidance

• Guidance for Southern Africa value chain cash breakeven price maintained at $55-$60 per barrel, with H1 at $53 per barrel.

• International Chemicals full-year Adjusted EBITDA guidance revised to $375-$450 million, margin outlook at 8%-10%.

• Net debt target of $3 billion and associated dividend trigger expected by FY 2028.

• FY 2028 target for International Chemicals EBITDA remains $750-$850 million, with 2/3 of uplift expected from self-help measures.

• FY26 targets include cash fixed cost below inflation, capital expenditure of R22-24 billion, and net debt below $3.7 billion.