Sasol Maintains Operational Resilience: Ramp-Up and Decarbonisation Take Center Stage
Sasol’s latest quarterly update for the period ending September 30, 2025, offers a revealing look at how the company is navigating ongoing macroeconomic and geopolitical headwinds. With production increases in Southern Africa and active steps toward decarbonisation, Sasol is working to ensure business continuity even as global tariffs and soft chemical pricing create hurdles.
Production Gains and Improved Safety Set Positive Tone
The ramp-up of the destoning plant in Southern Africa played a pivotal role this quarter, helping to lower average sinks below 14%. This enabled the restart of previously shuttered coal sections, resulting in increased coal output. Secunda Operations (SO) benefitted from better equipment reliability, pushing SO production higher and delivering much-needed momentum on the supply side. Additionally, mining recorded its first fatality-free financial year in 2025, though a recent incident at Thubelisha Colliery underscores ongoing safety priorities.
| Key Operations | Q1 FY26 Status |
|---|---|
| Destoning Plant Ramp-Up | Progressing to plan, sinks < 14% |
| Secunda Operations | Increased production due to improved reliability |
| Natref & Sasolburg | Operational performance improved |
| Mining Safety | First fatality-free financial year |
Southern Africa Operations Are a Bright Spot in Performance Metrics
The overall sales volumes for Fuels in Southern Africa climbed, driven by ongoing sales mix optimisation. While Chemicals Africa’s volumes held steady versus the prior year and quarter, persistent market softness pressured pricing and revenue. In contrast, the International Chemicals segment saw revenue climb from last quarter, powered by higher US sales, stronger pricing in Eurasia, and particularly robust Palm Kernel Oil (PKO) prices. Revenue and adjusted EBITDA in this division jumped compared to Q1 FY25, helped by ongoing margin optimisation efforts.
| Segment | Q1 FY26 vs. Q4 FY25 | Q1 FY26 vs. Q1 FY25 |
|---|---|---|
| Southern Africa Fuels | Higher sales volumes | Growth in mobility channel |
| Chemicals Africa | Volumes steady | Revenue lower (price softness) |
| International Chemicals | Revenue up (higher sales, better pricing) | Revenue and EBITDA up |
Strategic Initiatives: Mothballing, Rescues, and Decarbonisation
Sasol has kept a steady hand in managing plant closures and asset optimisation. Clean-up at the Alkylphenol (Germany) and Guerbet (US) sites is complete, with production at Texas and Augusta facilities now halted. Importantly, the second of three low-carbon boilers at Natref came online in Q1, boosting steam reliability and supporting Sasol’s decarbonisation targets, with a third boiler to follow next quarter.
Operational continuity at Natref has been maintained, even as Prax SA entered business rescue proceedings—underscoring Sasol’s ability to mitigate partnership risk and sustain supply in uncertain conditions.
Financial Targets on Track Despite Global Tariff Pressure
Sasol affirmed that business performance remains in line with market guidance. Southern Africa’s breakeven oil price remains steady at $55–60/bbl, and International Chemicals is pacing towards its US$450–550 million adjusted EBITDA target for FY26. Still, management acknowledges that recent global tariff changes have impacted financials and will continue to be monitored closely.
| Key Metrics | Q1 FY26 Target/Performance |
|---|---|
| Southern Africa Breakeven Oil Price | $55–60 per barrel |
| International Chemicals Adjusted EBITDA | $450–550 million (on track) |
| Plant Decarbonisation | 2 of 3 Natref boilers online |
Takeaway: Navigating Headwinds While Strengthening the Core
Sasol’s quarter showcases the dual realities of strong operational execution and persistent external challenges. As the company presses ahead with decarbonisation and asset optimisation, it is demonstrating a measured ability to meet or exceed internal targets. However, ongoing macro volatility and tariff shifts will require vigilant risk management. Investors may wish to track both production ramp-up milestones and tariff policy developments for early signals on Sasol’s path to meeting full-year guidance.
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