Johannesburg, South Africa – Sasol Limited (JSE: SOL; NYSE: SSL) has released its audited operating and financial results for the year ended 30 June 2026. Improved operational performance, continued cost management and disciplined capital allocation enabled the company to benefit from more supportive market conditions during the final quarter of the financial year, resulting in stronger earnings and further balance-sheet strengthening.

“2026 was a decisive year of delivery against the commitments we set out at our Capital Markets Day. We met or exceeded our commitments across our production and sales metrics, strengthened the foundation business and created a stronger platform for future growth and transformation,” said Simon Baloyi, President and Chief Executive Officer of Sasol.

The importance of reliable domestic energy and chemical-product supply, and Sasol’s role in delivering it, was reinforced during the fourth quarter following the commencement of conflict in the Middle East and the associated closure of the Strait of Hormuz. Sasol sustained uninterrupted operations and leveraged its integrated value chain to maintain reliable product supply to customers, while preserving cost and capital discipline.

In Southern Africa, Secunda Operations achieved its highest annual production in five years and exceeded market guidance. This was supported by improved coal quality following the successful implementation of the destoning plant and higher overall equipment availability. Together with the more supportive fourth-quarter macroeconomic environment, these improvements contributed to a lower oil break-even price.

The International Chemicals reset strategy continued to strengthen the competitiveness of the portfolio and helped to offset difficult market conditions experienced for most of the year, including lower United States ethylene margins and muted market demand. Supported by stronger markets in the fourth quarter, International Chemicals’ adjusted EBITDA in US dollar terms increased by 47% compared with the prior year.

Capital expenditure was 18% lower than the prior year, mainly reflecting the conclusion of major gas and environmental-compliance projects, the absence of a Secunda shutdown during the financial year and continued capital-optimisation initiatives. Net working capital was above target, primarily because of elevated pricing following the Middle East conflict and the build-up of fuels inventory.

“Management actions and the more supportive macroeconomic environment during the final quarter translated into robust cash generation and further balance sheet strengthening. We delivered on our 2026 net-debt target of below US$3,7 billion, reducing net debt by 11% to US$3,3 billion,” said Simon Baloyi.

Sasol also extended its debt-maturity profile through refinancing initiatives, maintained a strong liquidity position and continued to use its strategic hedging programme to manage oil-price and exchange-rate risks. The company remains focused on achieving net debt of below US$3 billion on a sustainable basis before resuming dividend payments.

Progress continued on Sasol’s Grow and Transform agenda. A further 330 MW of renewable energy came online during the year, taking renewable energy capacity in operation to more than 500 MW. Total secured renewable energy increased to more than 1 350 MW through power-purchase agreements.

“Safety remains our foremost priority. Tragically, we lost two colleagues during the year. While we saw encouraging improvements in several key safety indicators, we remain unwavering in our commitment to strengthen our safety culture and ensure everyone returns home safely,” said Baloyi.

“The progress achieved during 2026 demonstrates that, while there is still more work to do, consistent execution against our Capital Markets Day commitments is building a stronger, more competitive and resilient Sasol, better positioned to deliver sustainable shareholder returns,” said Baloyi.

Financial performance

Sasol closed the financial year with strong momentum. Improved operational performance, strict cost management and disciplined capital allocation created operating leverage across the business, positioning the company to convert improved market conditions during the latter part of the year into stronger earnings and further balance-sheet strengthening.

Adjusted earnings before interest, tax, depreciation and amortisation increased by 17% to R61 billion. The improvement reflected management actions, a 4% increase in sales volumes associated with improved production, a 7% increase in the average US dollar per barrel Brent crude-oil price and a more than 100% increase in refining margins following improved fuel differentials. These benefits were partially offset by a 7% stronger average rand-to-US-dollar exchange rate and the non-recurrence of the R5,5 billion Transnet SOC Limited settlement received in the prior year.

Cash fixed costs were maintained at R70 billion for the third consecutive year, with inflationary pressures offset through continued cost-optimisation initiatives.

Earnings before interest and tax increased by 37% to R25,7 billion. The result included non-cash remeasurement items, comprising impairments of R16,8 billion compared with R20,7 billion in the prior year, as well as unrealised losses of R1,1 billion relating to the translation of monetary assets and liabilities and the valuation of financial instruments and derivative contracts.

The impairments mainly related to the Secunda liquid-fuels refinery cash-generating unit of R7,7 billion, the Polyethylene cash-generating unit of R3,7 billion and the Production Sharing Agreement development in Mozambique of R3,8 billion. Management actions improved the recoverable amount of the Secunda cash-generating unit, although these benefits were offset by a stronger forecast rand-to-US-dollar exchange rate.

Basic earnings per share increased by 79% to R18,99, while headline earnings per share increased by 9% to R38,31 compared with the prior year. Net working capital, measured as the average percentage of turnover on a rolling 12-month basis, increased to 18,3%, above the guidance range of 15,5% to 16,5%. This was driven by higher fourth-quarter pricing, the use of Prax shareholding capacity at Natref and higher fuels volumes at year-end. These additional volumes will support planned shutdowns early in the 2027 financial year. Improving working capital remains a key priority and an important opportunity to strengthen cash conversion.

Capital expenditure decreased by 18% to R21 billion, mainly because of the conclusion of major feedstock-gas and environmental-compliance projects and the absence of a Secunda Operations shutdown during the financial year.

Cash generated by operating activities increased by 22% to R56,7 billion, reflecting stronger operational performance. Free cash flow declined by 5% to R11,9 billion, despite higher earnings and lower capital expenditure, primarily because of elevated year-end working capital. Excluding the prior-year Transnet SOC Limited net cash settlement after tax, free cash flow improved by 26%.

Net debt, excluding leases, decreased by 11% to US$3,3 billion from US$3,7 billion in the prior year and was below Sasol’s guidance of less than US$3,7 billion. Total debt reduced to US$5,7 billion, or R93,9 billion, from US$5,8 billion, or R103,3 billion. Liquidity remained strong at US$5 billion.

During the year, Sasol issued a five-year R5,3 billion floating-rate bond in exchange for US$300 million and a US$750 million bond maturing in 2033. The company also partially repaid its 2028 and 2029 bond maturities. These debt-neutral actions extended the maturity profile, reduced near-term refinancing risk and improved the regional composition of debt to better align with the underlying cash generation of Sasol’s assets.

Sasol’s proactive hedging programme continues to mitigate volatility associated with oil-price and exchange-rate movements. The 2027 oil-hedging programme is complete, while the 2027 rand-to-US-dollar hedging programme remains under way.

Dividend

Sasol’s dividend policy provides for the distribution of 30% of free cash flow, subject to net debt, excluding leases, being sustainably below US$3 billion. Although net debt reduced to US$3,3 billion as at 30 June 2026, it remained above this threshold. Accordingly, the Sasol Limited board of directors did not declare a final dividend.

Sasol’s full suite of audited financial results and supporting information can be accessed at www.sasol.com/investor-centre/financial-results.