Sasol Delivers on Its Promises: Substantial Progress, Yet Challenges Persist

Delivering on the Foundation

At the annual results presentation, the market heard a story it has been expecting for years: Sasol would finally strengthen its operational performance and solidify its balance sheet. Unlike previous years, this time the numbers substantiated the narrative. As Simon Baloyi put it, “We are not only delivering today, we are positioning Sasol for tomorrow” “We are not only delivering today, we are positioning Sasol for tomorrow.” — Simon Baloyi, President and CEO · 2026-09-01 Adjusted EBITDA rose 17% to ZAR 61 billion, while net debt fell 11% to USD 3.3 billion, the lowest level in a decade.

The company’s own keyword trajectory confirms the strategic shift. “deleverage” has become a dominant theme, and CFO Walt Bruns noted, “net debt reduced by a further 11% to USD 3.3 billion, the lowest level in 10 years and ahead of the profile we had at CMD.” “net debt reduced by a further 11% to USD 3.3 billion, the lowest level in 10 years and ahead of the profile we had at CMD.” — Walt Bruns, Executive in Finance/Financial Officer · 2026-09-01 The balance sheet is now strong enough to fund future investments and eventually resume dividends, a critical milestone given the company’s history.

Operational Turnaround and Macro Tailwinds

The operational improvements are not just aspirational. Sasol’s Southern African value chain delivered one of its strongest years, with Secunda reaching a five-year high production level of 7.26 million tonnes. This was aided by the destoning plant improving coal quality, with coal purchases expected to drop significantly in FY27. The company also brought over 500 MW of renewable energy online during the year, keeping it on track to its 2030 target.

But the results were also helped by a favorable macro backdrop, particularly in the fourth quarter. The Middle East conflict generated higher oil prices and refining margins, though Walt Bruns was quick to emphasize that the stronger result was “not simply market-driven.” “While market conditions became more supportive in the second half of FY '26, the stronger result was not simply market-driven.” — Walt Bruns, Executive in Finance/Financial Officer · 2026-09-01 Indeed, cash fixed costs were held flat despite inflation, and disciplined capital allocation brought CapEx 18% lower while still delivering key projects like the Mozambique PSA and the destoning plant.

International Chemicals, long a drag, also showed signs of the reset working. Antje Gerber highlighted the success of the self-help measures, noting, “we have seen an increased demand right now and have made also customer commitments for our expansion in Brunsbüttel.” “we have seen an increased demand right now and have made also customer commitments for our expansion in Brunsbüttel.” — Antje Gerber, Head of International Chemicals · 2026-09-01 The business delivered USD 604 million of EBITDA, and the recent restart of the paraffin unit in Augusta demonstrated agility in capturing market opportunities.

Guidance and Challenges Ahead

For FY27, Sasol has guided to net debt remaining below USD 3.3 billion, and reiterated its commitment to sustainably reach below USD 3 billion between FY27 and FY28. The company also reaffirmed its 30% dividend payout once that threshold is achieved. However, the path is not without hurdles. The FY27 guidance for International Chemicals EBITDA is deliberately lower at $450-600 million, reflecting prudent assumptions that the Middle East tailwinds will not persist. As Antje Gerber put it, “we do not rely on market recovery to deliver our objectives.”

The working capital build at year-end, partly due to higher commodity prices and the ongoing PRAX business rescue, is expected to unwind in H1 FY27, a position Walt Bruns explained: “We believe that the working capital at year-end sets us up nicely for FY '27 in terms of cash and our ability to generate cash.” “We believe that the working capital at year-end sets us up nicely for FY '27 in terms of cash and our ability to generate cash.” — Walt Bruns, Executive in Finance/Financial Officer · 2026-09-01 Yet the phase shutdown at Secunda and a projected decline in coal purchase volumes will pressure output. The company also acknowledged that refining margins and chemical prices remain highly volatile.

Prior to this year, the tone was more cautious. In the February 2026 interim call, Walt Bruns guided to “below USD 3.7 billion” of net debt by year end, and the actual outcome of USD 3.3 billion shows the team has exceeded its own expectations. “we are guiding that we will still be below USD 3.7 billion by the end of the year on net debt.” — Walt Bruns, CFO or Financial Executive · 2026-02-23 Similarly, at the FY25 results, Simon Baloyi had said, “We are not declaring victory, but we are increasingly confident.”

We are not declaring victory, but we are increasingly confident that we are building a more competitive and more resilient business that can deliver our financial year '28 aspiration.

In summary, Sasol has demonstrated that its foundation business is stronger, and its financial flexibility is improving. However, with a busy FY27 ahead and the fading of extraordinary conditions, the company must now prove it can maintain momentum through the challenges of its own making and those it cannot control.