Sasol Limited delivered business performance metrics for the year ended 30 June 2026 that were within or above market guidance across all production and sales categories. The company attributes this outcome to stronger production performance and a more supportive macroeconomic backdrop during the last quarter of the financial year. Despite two tragic fatalities earlier in the year, safety indicators improved during FY26, with the fourth quarter showing encouraging progress.

Operational Performance

In Southern Africa, Secunda Operations (SO) achieved its highest annual production in five years, exceeding market guidance. This result was underpinned by the successful implementation of the destoning project, which kept average sinks below the guidance range of 12 - 14%, alongside increased natural gas availability and stable operations. Natref maintained strong operational performance, while ORYX GTL remained offline due to prior gas supply disruptions.

FY26 liquid fuels sales volumes were higher than the prior year, supported by higher refining margins that positively impacted earnings. However, these gains were partially offset by hedging losses related to crude oil purchases. Chemicals Africa revenue increased in the quarter due to higher pricing, while overall volumes remained at the higher end of market guidance despite planned shutdowns affecting Base Chemicals sales volumes.

International Chemicals and Strategic Initiatives

The International Chemicals (IC) business benefited from strategic reset initiatives, with revenue in America driven by significantly higher market pricing and stable production. In Eurasia, revenue increased through proactive cost pass-through management, though sales volumes were lower following a force majeure on certain products constrained by the Middle East conflict. Consequently, IC Adjusted EBITDA is expected to exceed the market guidance range of US$375 - 450 million.

Sasol continues to manage exposure to oil price and currency volatility through its group hedging programme. The FY27 oil hedging programme is complete, while the ZAR/USD hedging programme remains underway.

Business Updates and Outlook

Sasol has submitted its Maximum Gas Price application to the National Energy Regulator of South Africa (NERSA) for FY27 – FY30. In response to constrained global n-paraffin and LAB availability, the company initiated the restart of its paraffin production unit in Augusta, Italy, expected in H1 FY27. The phased rollout of a modern ERP system in Germany commenced in July 2026.

Renewable energy capacity increased to more than 500 MW after 330 MW was brought online during the quarter. The company made a final investment decision of €60 million in Brunsbüttel, Germany, to expand specialty alumina capabilities, with beneficial operation expected in FY29. Sasol and Topsoe agreed to prepare for the operational wind-down of the Zaffra joint venture while continuing collaboration on sustainable aviation fuel technology.

FY26 financial metrics are expected to be in line with or exceed guidance, excluding net working capital, which was higher due to pricing impacts from the Middle East conflict and fuels inventory build. Full FY26 financial results and the FY27 outlook will be released on 1 September 2026.

JP Morgan analyst Alex Comer has downgraded Sasol from Overweight to Neutral, adjusting the investment stance on the stock. The rating revision signals a shift in the firm's expectations regarding the company's future performance relative to its previous assessment.

The downgrade moves Sasol out of the buy-equivalent rating category, suggesting that the risk-reward profile is now viewed more balanced. This action follows a review of the stock's position within the analyst's coverage universe.