Sasol posts 52% drop in earnings, revenue hits $7.66 billion in H1 2026

Sasol, the Gauteng-based energy and chemicals group led by South African executive Simon Baloyi, reported flat revenue for the first half of its 2026 fiscal year, as softer oil prices and weaker global chemical margins weighed on earnings.

Turnover of R122.4 billion ($7.66 billion) remained flat compared to the prior period, supported by 3% increase in sales volumes and despite the softer macro environment

Market pressures drag earnings lower
While turnover remained resilient, profitability came under pressure. Adjusted EBITDA fell 12% to R21 billion ($1.31 billion), reflecting a 17% decline in the average rand-per-barrel Brent crude oil price and weaker U.S. dollar-based chemicals basket prices.

Earnings before interest and tax (EBIT) dropped 52% to R4.6 billion ($287.75 million), down from R9.5 billion ($594.26 million) a year earlier, largely due to R7.8 billion ($487.91 million) in impairments linked to the Secunda liquid fuels refinery and Sasol’s Mozambican gas assets.

Simon Baloyi, Sasol’s CEO, reaffirmed commitment, stating, ” We are showing consistent progress in the implementation of our strategic initiatives as set out in our Capital Markets Day plan. This is strengthening our foundation business, helping us to mitigate ongoing global market volatility and macroeconomic headwinds, building resilience for the future.”

Operational gains cushion blow
Operationally, Sasol delivered notable improvements. Production volumes at its Secunda Operations rose 10%, driven by improved gasifier availability, no major shutdowns, and the successful commissioning of a destoning plant at Sasol Mining in December 2025.

Disciplined cost control helped lower cash fixed costs. At the same time, capital expenditure was cut 43% to R8.5 billion ($531.69 million), reflecting the absence of a Secunda shutdown and reduced spending on environmental compliance projects nearing completion.

The company generated positive free cash flow of R794 million ($49.67 million), its first first-half positive free cash flow in four years, marking a sharp turnaround from the R1.3 billion ($81.32 million) deficit recorded a year earlier.

Debt and balance sheet focus
Sasol continues to prioritize deleveraging. Net debt (excluding leases) eased to R63.3 billion ($3.96 billion), compared to R65 billion ($4.07 billion) at June 30, 2025, bringing its net debt-to-Adjusted EBITDA ratio to 1.6 times. Total debt declined to R93.5 billion ($5.85 billion), supported by repayments and refinancing initiatives aimed at reducing U.S. dollar exposure and funding costs.

Liquidity remains robust at over $4 billion, giving the group flexibility amid volatile global markets. However, with net debt still above its $3 billion dividend trigger, the board opted not to declare an interim dividend.

Outlook trimmed
Sasol expects capital expenditure for FY2026 to range between R22 billion ($1.38 billion) and R24 billion ($1.5 billion), down from previous guidance, as capital optimisation efforts continue. Its International Chemicals division revised its full-year Adjusted EBITDA outlook downward to $375 million–$450 million, citing weaker macroeconomic conditions and an unplanned outage at its Louisiana ethylene cracker.

Operating in 33 countries and employing more than 30,000 people, Sasol remains a cornerstone of South Africa’s energy and chemicals industry. Since taking the helm, Baloyi has emphasized disciplined capital allocation, proactive hedging, and operational reliability as the company navigates heightened geopolitical tensions and evolving global trade dynamics.

With positive free cash flow restored and production momentum improving, Sasol is betting that tighter cost control and stronger asset performance will help reinforce its balance sheet and position the group for more sustainable shareholder returns.