Integrated_Annual_Report_2026 - Flipbook - Page 68
INTRODUCTION
EXECUTING
STRATEGY
DRIVING SUSTAINABLE
VALUE CREATION
SASOL AT A
GLANCE
DELIVERING
BUSINESS VALUE
SUMMARISED FINANCIAL
PERFORMANCE
CORPORATE
GOVERNANCE
SUSTAINABILITY
REPORT
REMUNERATION
REPORT
ASSURANCE /
ADMINISTRATION
CHIEF FINANCIAL OFFICER STATEMENT CONTINUED
Financial performance for the year
Net working capital as a percentage of turnover for the year,
increased to 18,3% (16,6% on rolling 6-month basis), above our
guidance range of 15,5% – 16,5%. This was driven by higher
Q4FY26 pricing, the impact of utilising Prax’s shareholding capacity
at Natref and higher fuels volumes at year end. These volumes
will, however, support planned shutdowns early in FY27. Improving
working capital remains a key priority and represents a significant
opportunity to strengthen cash conversion over the coming year.
Delivering stronger financial performance
We delivered a stronger financial performance in FY26,
with improved earnings and robust cash generation.
We delivered or exceeded against all our key market
guidance metrics with exception of net working capital
which was above target range at year-end due to
higher pricing resulting from the ME conflict and fuels
inventory build.
Free cash flow of R11,9 billion decreased 5% compared to the prior
year, despite higher earnings and lower capital expenditure. Cash
flow was impacted by higher afore-mentioned year-end working
capital. Excluding the Transnet SOC Limited net cash settlement
received in the prior year, cash generation improved 26%.
Cost containment remains one of our key focus areas.
Cash fixed costs were maintained at R70 billion for the
3rd year in a row, with inflation saved through continued
cost optimisation initiatives.
Adjusted EBITDA (Rand billion)
400
249
200
45
7,2
30
5
20
100
10
0
Jun 24
Turnover
*
Jun 25
Jun 26
0
4,1
3,7
4
51,8
51,8
3,3
10
40
30
51,8
11,9
US$bn
272
5
12,6
Rbn
Rbn
275
60
50
Rbn
46
45
Net debt excluding leases (US$ billion)
15
60,7
60,0
%
47
Total impairments of R16,8 billion mainly related to the Secunda liquid
fuels refinery cash generating unit (CGU) (R7,7 billion), the Polyethylene
CGU (R3,7 billion) and the Production Sharing Agreement development
in Mozambique (R3,8 billion). While management actions improved
the recoverable amount of the CGUs, these benefits were offset by the
stronger forecast Rand/US$ exchange rate and longer term US$ pricing.
We remain focused on progressing initiatives further to be incorporated
in the impairment calculations.
Free cash flow (Rand billion)*
75
60
300
In International Chemicals, the reset programme continues to improve
the competitiveness of the portfolio and largely offset the impact of
weaker-than-expected market conditions experienced during the
first nine months of the year. Together with stronger market conditions in
the fourth quarter, this supported adjusted EBITDA of US$604 million.
Approximately US$150 – 200m of Adjusted EBITDA is directly as a
result of the benefit of stronger pricing associated with the ME conflict.
Capital expenditure of R21 billion was 18% lower than the prior
year, mainly due to the conclusion of major feedstock gas and
compliance spend, together with the absence of the Secunda
Operation shutdown in the financial year. We continue to optimise
capital across the portfolio, while maintaining safe, reliable and
compliant operations. Importantly, this progress has enabled us
to revise our FY27 capital guidance and resulted in cumulative
savings of R12 – 14 billion over the 3 year-period against the
ranges communicated at CMD.
Adjusted EBITDA increased by 17% to R61 billion, driven
by 4% higher sales volumes, stronger oil prices and
significantly improved fuel differentials following the ME
conflict in the fourth quarter. These benefits were partly
offset by a stronger Rand/US dollar exchange rate. The
Gross Margin % improved from 45% to 46% with variable
costs also increasing mainly due to higher sales volumes
and increased crude purchases to accommodate the
higher Natref shareholding capacity following the Prax
business rescue.
Turnover (Rand billion) and gross margin (%)
In the Southern Africa business, we achieved an oil breakeven price of
US$49/bbl. Excluding the macroeconomic tailwinds and the absence of
a Secunda shutdown, the breakeven would have been US$55 to 58/bbl.
This compares positively to US$63/bbl in FY25, excluding the once-off
Transnet settlement. The improvement reflects the continued benefits of
our operational improvement, cost and capital optimisation initiatives.
2
1
15
0
3
0
Jun 24
Jun 25
Jun 26
Jun 24
Jun 25
Jun 26
0
Jun 24
Jun 25
Jun 26
Gross margin %
Free cash flow is defined as cash available from operating activities less first order capital and related capital accruals. The Free cash flow calculation has been updated, in line with the revised capital allocation framework, to include selective growth and
transform capital as part of first order capital, previously included under second order capital. Prior years have been reclassified accordingly.
SASOL INTEGRATED REPORT 2026
67
