Full Year 2026 Sasol Limited Earnings Call Transcript
Key Points
- Sasol Ltd (SSL) delivered a 17% increase in adjusted EBITDA to ZAR61 billion, exceeding its financial year '26 targets.
- The company strengthened its balance sheet, reducing net debt by 11% to USD3.3 billion, the lowest level in 10 years and ahead of its target.
- Operational performance improved significantly, with Secunda reaching a five-year high production of 7.26 million tonnes and the Southern African oil breakeven reducing to $49 per barrel.
- The International Chemicals reset is delivering measurable progress, with adjusted EBITDA of USD604 million and improved competitiveness, positioning the business to capture market opportunities.
- Sasol Ltd (SSL) made tangible progress on its growth and transformation agenda, bringing over 500 megawatts of renewable energy online and achieving a first-in-Africa sustainability certification for Natref.
- The company reduced capital expenditure by 18% to ZAR21 billion without compromising safety or asset integrity, while generating approximately ZAR12 billion of free cash flow.
- Sasol Ltd (SSL) experienced the tragic loss of two colleagues during the year, highlighting ongoing safety challenges despite broader improvements in safety metrics.
- The company's working capital was above its target range at 18.3% on a 12-month turnover basis, primarily due to higher commodity prices and increased inventory levels.
- Chemical markets remain challenging with excess capacity and weaker demand, and full-year US ethylene margins were still 8% below the prior year.
- The company recognized impairments on the Secunda liquid fuels refinery CGU and the South African polyethylene CGU due to a stronger rand outlook and lower long-term pricing assumptions.
- Sasol Ltd (SSL) faces uncertainty in the macro environment, including volatile oil prices and a stronger rand, which continue to pose significant earnings headwinds.
- The company's credit ratings remain on negative outlook from Moody's and S&P, constrained by the sovereign rating of South Africa, despite a stronger balance sheet.
Good morning, and welcome to Sasol's annual results presentation for financial year '26. My name is Tiffany Sydow from Investor Relations. And on behalf of the Sasol executive management team, we are pleased that you could join us today.
With me is Simon Baloyi, our President and CEO of Sasol; and Walt Bruns, the Chief Financial Officer. The group executive team is present today as well and will join for the market call, which follows directly after the presentations. As a reminder, the presentation and all supporting materials are available on our website since this morning.
As a reminder, our strategy follows a two pillar approach: Firstly, to strengthen our foundation business, where Simon will begin today's presentation with a business overview, which is then followed by Walt, who will take us through the financial performance for the full year. The second pillar addresses our pathway to grow and transform the business in the long term, where Simon will conclude and provide an update on our progress in this area.
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