Sasol’s headline earnings per share fell 34% in the first half of its 2026 financial year as plunging oil prices and a stronger rand overwhelmed operational improvements. The results highlight the commodity producer’s exposure to factors beyond its control.
Why it matters: Sasol is South Africa’s largest industrial company and a bellwether for the domestic chemicals and fuels sector. Its earnings trajectory signals how exposed South African producers remain to global oil volatility and currency swings.
External headwinds
Oil prices fell 13% during the period. The rand strengthened approximately 3% against the dollar. Combined, these two factors produced a 17% decline in the rand oil price, Sasol’s key revenue driver. The average price of its chemical product basket also dipped between 3% and 5%.
Operational gains
Production volumes at Secunda, Sasol’s flagship coal-to-liquids facility in Mpumalanga, rose 10% year on year. Cash costs improved 2% and capital expenditure dropped 40%. Sales volumes increased 3%.
CEO Simon Baloyi said: “The team actually did very well in terms of what is under our control.” He pointed to sustainable improvements in maintenance and gasifier performance at Secunda.
Balance sheet and dividends
Net debt edged up from $3.7 billion to $3.8 billion. Sasol has set capital expenditure guidance of R22-R24 billion for the full year. The company is targeting a $3 billion net debt threshold before resuming dividend payments, which it expects to happen in the 2028 financial year.
Sasol has hedged 50-65% of its oil exposure and 20-25% of its rand exposure, providing some buffer against further volatility.