SASOL Integrated Report 2025_Final_28 August 2025 - Flipbook - Page 53
INTRODUCTION
ABOUT SASOL
STRATEGIC OVERVIEW
PORTFOLIOS
ESG
REMUNERATION REPORT
DATA AND ASSURANCE / ADMINISTRATION
CHIEF FINANCIAL OFFICER’S STATEMENT continued
Strengthening the balance sheet
remains a priority
Capital allocation discipline
Net debt (excluding leases) decreased by 11% to
US$3,7 billion (R65 billion), below our target of
lower than US$4 billion. Total debt decreased by
10% to US$5,8 billion (R103,3 billion). Our liquidity
improved by 13% to US$4,1 billion (R72,3 billion).
This reflects our focused internal delivery, cost
control and a stronger rand/US dollar closing
exchange rate
(R17,75 compared to R18,19 in the prior year).
Net debt remains our dividend trigger, which we
continue to target between FY27 and FY28 in line
with our CMD guidance. Until then, our focus is on
increasing cash generation and reducing debt to
support both the dividend reinstatement and
allocation of 2nd order capital in line with our
capital allocation framework.
We further strengthened our financial position
through a R5,3 billion bond issuance. This
issuance supports our strategy to better align the
currencies of our regional liabilities and cash flow
and at a lower cost relative to other capital
market options. Our proactive hedging strategy
also continues to protect us from volatility in oil
and currency markets.
Our capital allocation framework sets out the
principles that guide how we allocate capital in
order to create sustainable value for all our
stakeholders.
First-order Maintain capital is directed to ensure
safe, reliable, and compliant operations. Over the
past year, we’ve made good progress in driving
greater efficiency in our capital profile. We are
targeting R23 to R31 billion per annum in nominal
terms over the next three years, with lower
capital in years without major shutdowns.
Maintenance spend continues to make up
approximately 60% of this, including shutdowns
and renewals.
A key priority remains ensuring stable and
competitive feedstock supply.
As gas development costs in the Mozambique PSA
licence decline, we are ensuring that Mining receives
the capital it needs to support long-term reliability
and performance, considering both capital and
non-capital options. Our optimised Emission
Reduction Roadmap (ERR) is also unlocking further
capital efficiencies, and we are now targeting R4 to
R7 billion versus our previous R11 to R16 billion.
In addition to Maintain capital, we have allocated
R1 billion in FY26 and R2 billion from FY27 for
selective growth and transformation projects. A
key focus is on renewables, which support both
decarbonisation and utility cost reduction. Any
step-up in this selective capital allocation will be
dependent on the successful recycling of carbon
tax in South Africa, where we are actively
engaging with stakeholders to expand the
definition of expenditure that qualifies and allows
for the transformation agenda in South Africa to
be self-funded from carbon tax revenue.
We remain committed to reducing our net
debt target of below US$3 billion
(previously US$4 billion). Until we reach this
target, we will prioritise deleveraging over all
other uses of capital. Our dividend policy of 30%
of free cash flow remains, which we believe
strikes the right balance, enabling shareholders
to share in our success, while maintaining
flexibility to reinvest in growth, transformation,
and/or return additional capital to shareholders.
REVISED CAPITAL ALLOCATION FRAMEWORK
1
2
1ST ORDER
ALLOCATION
Maintain safe
and reliable operations
Selective Growth
and Transform
1
Optimise capital
Ensuring continued safe and reliable operations
2
Selective Growth and Transform (1st order)
Smaller, high return growth projects and incremental transform initiatives
3
Strengthen the balance sheet
Reinforce financial resilience to manage volatility
4
Larger Growth and Transform capital shifted
Prioritise larger, value-accretive investments once balance sheet allows
3
NET DEBT1 SUSTAINABLY2
