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Sasol Ltd (SSL)
NYSE:SSL
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Sasol
(NYSE:SSL)
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Rating:62Neutral
Price Target:
$12.50
▲(91.72% Upside)
Action:ReiteratedDate:03/17/26
The score is driven primarily by mixed financial performance (improving leverage but inconsistent profitability and pressured margins) and improving but still challenged earnings-call fundamentals (better cash discipline and operations offset by impairments and macro headwinds). Technicals are supportive but very overbought, while valuation is a notable drag due to the high P/E and no dividend support.
Positive Factors
Free cash flow recovery
H1 positive free cash flow and a >100% improvement versus prior period show durable improvement in cash conversion. Sustained FCF supports deleveraging, funds necessary maintenance and growth capex, and increases resilience to commodity cycles over the next 2–6 months.
Improving leverage and liquidity
Lower gross debt and ample liquidity provide ongoing financial flexibility. A stronger liquidity buffer and a clear deleveraging pathway reduce refinancing risk, support operational continuity and strategic investments, and raise likelihood of meeting medium-term balance sheet targets.
Operational recovery at Secunda
Higher Secunda production and a working destoning plant improve uptime and feedstock quality, supporting steady volumes and margins. Improved asset reliability is a structural benefit that enhances cash generation and reduces unit costs across fuel and chemical value chains.
Negative Factors
Large impairments
Significant non‑cash impairments reflect reduced recoverable values and weaker long‑term asset economics. These write‑downs weaken equity cushions, constrain capital allocation flexibility, and signal structural challenges in some growth projects over the medium term.
Weak chemicals markets and margin pressure
Sustained chemical sector overcapacity, softer demand and high European energy costs compress margins and limit pricing power. This structural industry pressure can keep International Chemicals' returns muted and slow EBITDA recovery despite operational fixes.
Deleveraging still incomplete
Although debt metrics have improved, remaining net debt above near‑term targets delays return of capital and limits strategic optionality. Continued macro or operational headwinds could push expected deleveraging timelines out further, affecting investor outcomes.
Sasol (SSL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.14B
Dividend YieldN/A
Average Volume (3M)2.90M
Price to Earnings (P/E)76.2
Beta (1Y)0.57
Revenue Growth-6.73%
EPS GrowthN/A
CountryUS
Employees27,678
SectorBasic Materials
Sector Strength58
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)0.58
Shares Outstanding644,261,660
10 Day Avg. Volume3,587,344
30 Day Avg. Volume2,899,168
Financial Highlights & Ratios
PEG Ratio-0.06
Price to Book (P/B)0.33
Price to Sales (P/S)0.20
P/FCF Ratio3.88
Enterprise Value/Market Cap27.91
Enterprise Value/Revenue0.93
Enterprise Value/Gross Profit3.40
Enterprise Value/Ebitda5.58
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusModerate Sell
Number of Analyst Covering1
EPS Forecast (FY)1.45
Revenue Forecast (FY)$14.76B
Sasol Business Overview & Revenue Model
Company DescriptionSasol Limited, together with its subsidiaries, operates as an integrated chemical and energy company in South Africa. The company operates through six segments: Mining, Gas, Fuels, Chemicals Africa, Chemicals America, and Chemicals Eurasia. It offers acetate, acrylate monomer, ammonia, carbon, chlor alkali, explosive, fertilizer, glycol ether, hydrocarbon blend, inorganic, ketone, mining, polymer, and wax chemicals, as well as lacquer thinners, light alcohols, and phenolics or cresylic acids. The company also markets and sells brick, electrical, engine, hand, non-ferrous, and window cleaners, as well as parts wash products and super soaps; degreasers; bitumen, fuel oils, lubricants, motor fuels, and gas-to-liquid fuels; and other fuels, such as illuminating paraffin, light cycle and distillate oils, light straight run fuels, and synthetic paraffinic kerosene. In addition, it wholesales diesel and petrol; operates coal mines; offers engineering services; and develops lower carbon solutions. Further, the company explores, develops, produces, markets, and distributes natural gas and related products through pipelines. It serves adhesive, agriculture and forestry, automotive and transportation, aviation, burner fuel, chemical, construction and material, corrosion protection, electrical and electronic, flavor and fragrance, furniture, health and medical, household and consumer goods, industrial product, lubricant, manufacturing, mining, packaging, paint and coating, personal care, pharmaceutical, plastic and polymer, publishing and ink, pulp and paper, rubber and tyre, specialty graphite, steel and foundry, textile and leather, water treatment, and other industries. Sasol Limited was founded in 1950 and is headquartered in Johannesburg, South Africa.
How the Company Makes MoneySasol primarily makes money by converting low-cost or strategically sourced feedstocks (notably coal and natural gas, where available) into higher-value fuels and chemical products, and selling those outputs to industrial customers, wholesalers/retail channels, and other end markets.
Key revenue streams include:
- Sale of fuels and fuel-related products: Sasol produces and sells refined petroleum products and synthetic fuels (including products such as gasoline, diesel, jet fuel and associated value-chain products where applicable). Revenue is driven by volumes sold and prevailing market-linked pricing for refined products, which is influenced by crude oil/product benchmarks, regional supply-demand balances, and local pricing mechanisms.
- Sale of chemical products: Sasol manufactures and sells a range of chemical intermediates and finished chemical products (including petrochemicals and specialty/performance chemicals where applicable). Earnings depend on chemical selling prices (often linked to global commodity benchmarks), product mix, and demand from downstream sectors such as plastics, detergents, solvents, industrial applications and other chemical value chains.
Economic/operational factors that materially affect how Sasol earns:
- Margin capture from integration: By operating across feedstock procurement/production, conversion (refining/chemical plants), and marketing, Sasol can capture margin at multiple points in the value chain. Integration also allows feedstock and product optimization (e.g., shifting production slates toward higher-margin products when possible).
- Commodity and spread exposure: Profitability is highly sensitive to commodity prices (oil, gas, coal, and chemical benchmarks) and key spreads (e.g., the difference between input/feedstock costs and prices for refined products and chemicals).
- Volumes, plant reliability, and utilization: Revenue and operating profit are strongly influenced by production uptime, throughput, and the ability to run complex assets safely and efficiently.
- Currency and regional pricing dynamics: Because many relevant benchmarks are denominated in major currencies while a meaningful cost base and selling environment can be local/regional, exchange rates and regional price regulations/mechanisms can affect reported revenue and margins.
Significant partnerships: null
Sasol Earnings Call Summary
Earnings Call Date:Feb 23, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 25, 2026
Earnings Call Sentiment Neutral
The call balanced clear operational and financial progress against meaningful macro and asset-specific headwinds. Management reported tangible delivery on controllable levers (positive free cash flow, lower cash fixed costs, CapEx discipline, Secunda production improvement, successful destoning plant start-up, hedging and liquidity) and meaningful progress on the Grow & Transform agenda (renewables, offsets, SAF grant). Offsetting these positives are sizable impairments, a large reduction in EBIT driven by non-cash remeasurements, deferred gas monetization and continued weak chemical market conditions. Overall, the company is demonstrating disciplined execution and improving resilience, but significant near-term challenges and impairments temper the outlook.Q2-2026 Updates
Positive Updates
Positive free cash flow and improved cash generation
Generated positive free cash flow in H1 FY26 for the first time in four years with a >100% improvement versus prior period; free cash flow generation cited as a key success of execution of cash levers.
Net debt and liquidity position
Net debt ended at USD 3.8 billion with liquidity headroom of more than USD 4 billion; gross debt down 9% year-on-year and management remains on a deleveraging pathway aiming for net debt below USD 3.7 billion by year-end (target now likely FY28 under current macro).
Operational recovery at Secunda and Southern Africa value chain
Secunda production increased 10% year-on-year supported by improved coal quality and gasifier availability; destoning plant reached beneficial operation in December, operating at target specification (~12% ash) and within budget, helping restore value chain stability.
Cost and capital discipline
Cash fixed costs reduced (group -2% year-on-year) and capital expenditure was 43% lower year-on-year in H1 FY26; full-year CapEx guidance was revised down by ZAR 2 billion to ZAR 22–24 billion and the company emphasised that this is not a deferral rolling into later years.
International Chemicals self-help progress
International Chemicals adjusted EBITDA improved ~10% year-on-year despite tough markets, with cash fixed costs down 6% YoY (10% when normalized for exchange rates) and asset/variable cost optimization and commercial initiatives beginning to deliver benefits.
Hedging and risk management
Completed FY26 hedging program; oil hedges cover 55–60% with an average floor of approximately $59/bl and FX cover of 25–30% via zero-cost collars in the ZAR18–22 range, helping manage macro volatility and protecting the balance sheet.
Renewables and Grow & Transform progress
Secured an additional 300 MW of renewable energy bringing total secured capacity to >1.2 GW (target 2 GW by 2030); 180 MW operational, 740 MW under construction; received renewable energy trading licence and contracted ~9 million tonnes of carbon offsets (~60% of near-term requirement).
Commercial and operational wins at Natref and RBCT
Natref operational performance improved (commissioning of last low-carbon boiler) and Sasol leased Richards Bay Coal Terminal capacity generating additional income (management later quantified >ZAR1 billion from exports plus ~ZAR0.5 billion leasing entitlement).
Negative Updates
Group earnings pressure and lower adjusted EBITDA
Group adjusted EBITDA was lower year-on-year due to weaker macro conditions and softer chemical pricing; gross margin declined 6% YoY and overall earnings were impacted by commodity and FX dynamics.
Significant impairments and non-cash remeasurements
Earnings before interest and tax decreased 52% largely due to non-cash remeasurement items; total impairments of ZAR 7.8 billion (vs ZAR 5.7 billion prior year) including ZAR 3.0 billion impairment on Secunda liquid fuels refinery CGU (fully impaired) and ZAR 3.9 billion impairment related to Mozambique/PSA gas.
Challenging macro environment
Brent crude down 14% YoY and the rand oil price down c.17% YoY; global chemical markets faced overcapacity, softer demand and high European energy costs—these external factors weighed on pricing and margins across the portfolio.
Mozambique/PSA gas delays and deferred monetization
Start-up delays at the CTT gas-to-power project and physical restrictions at PSA led to deferred gas monetization, a revised gas production profile and related impairment (ZAR 3.9 billion); gas EBITDA declined on lower volumes and FX headwinds.
Unplanned outages and portfolio disruption
An unplanned JV ethylene cracker outage at the end of the prior year and other operational constraints contributed to weaker-than-expected International Chemicals market outcomes and forced additional reset actions.
Safety incident
A tragic fatality occurred in September 2025; investigation found gaps in risk awareness and inconsistent adherence to safety rules. Management reported strengthened controls and improvements in leading safety indicators but the fatality remains a material negative.
Net debt still above management’s near-term target
Net debt at USD 3.8 billion is slightly above the full-year target (below USD 3.7 billion); management now expects the originally communicated net debt target and dividend trigger (USD 3.0bn) to be achieved around FY27–FY28 under varying macro scenarios.
Working capital and inventory timing
Temporary increase in net working capital in H1 due to timing lag between higher production and sales; management expects unwind opportunities before year-end but working capital build weighed on near-term cash flow.
Company Guidance
The company reiterated disciplined financial guidance and targets for FY‑26 and beyond: H1 delivered positive free cash flow (first time in 4 years, >100% improvement) and 3% higher sales volumes while gross margin fell 6% and EBIT declined 52% (driven in part by ZAR 7.8bn impairments, including ZAR 3.0bn at Secunda and ZAR 3.9bn on the Mozambique/PSA). Net debt ended at USD 3.8bn with a year‑end target below USD 3.7bn (CMD net‑debt/dividend trigger of USD 3.0bn expected around FY‑28 under current macro assumptions); liquidity headroom remains >USD 4bn and gross debt is 9% lower YoY. Capital guidance was reduced by ZAR 2bn to ZAR 22–24bn for FY‑26 (H1 CapEx was 43% lower YoY); cash fixed costs were cut ~2% group‑wide (Chemicals cash fixed costs down 6% YoY, 10% when FX‑normalised) and Sasol aims to keep cash fixed cost increases below inflation and net working capital between 15.5–16.5%. Hedging is in place (H2 oil hedge cover ~55–60% with an average floor ≈$59/bbl; 25–30% of rand‑USD exposure hedged via zero‑cost collars ~ZAR18–22) and International Chemicals guidance was revised to roughly USD 450m adjusted EBITDA for FY‑26 (margin 8–10%) with a FY‑28 EBITDA ambition of USD 750–850m.Sasol Financial Statement Overview
Summary
Mixed fundamentals: improved leverage management on the balance sheet, but profitability has been volatile (including a significant loss in 2024), margins have compressed, revenue declined in 2025, and free cash flow growth has been challenged despite decent operating cash generation.Income Statement
Sasol's income statement shows a mixed performance. The gross profit margin has been relatively stable, but the net profit margin has been volatile, with a significant loss in 2024. Revenue growth has been inconsistent, with a decline in 2025. The EBIT and EBITDA margins have decreased over the years, indicating pressure on operational efficiency.65
Positive
Balance Sheet
The balance sheet reflects a moderate financial position. The debt-to-equity ratio has improved from 2020 to 2025, indicating better leverage management. However, the return on equity has been low, suggesting limited profitability on shareholders' investments. The equity ratio is stable, showing a balanced asset structure.70
Positive
Cash Flow
Cash flow analysis reveals challenges in free cash flow growth, with negative growth in recent years. The operating cash flow to net income ratio indicates decent cash generation relative to earnings, but the free cash flow to net income ratio suggests room for improvement in converting earnings to cash.60
Neutral
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 243.58B | 249.10B | 275.11B | 289.70B | 272.75B | 201.91B |
| Gross Profit | 66.82B | 105.95B | 121.71B | 122.32B | 135.43B | 104.42B |
| EBITDA | 40.71B | 35.62B | 57.88B | 64.47B | 43.29B | 43.29B |
| Net Income | 2.40B | 6.77B | -44.27B | 8.80B | 38.96B | 9.03B |
Balance Sheet | ||||||
| Total Assets | 339.37B | 359.56B | 364.98B | 433.84B | 419.55B | 360.74B |
| Cash, Cash Equivalents and Short-Term Investments | 39.96B | 46.66B | 47.56B | 53.93B | 43.14B | 31.23B |
| Total Debt | 125.17B | 120.67B | 135.16B | 138.69B | 119.36B | 116.85B |
| Total Liabilities | 182.83B | 201.94B | 217.55B | 232.31B | 226.35B | 208.27B |
| Stockholders Equity | 151.15B | 152.43B | 143.00B | 196.90B | 188.62B | 146.49B |
Cash Flow | ||||||
| Free Cash Flow | 14.69B | 12.89B | 7.31B | 18.45B | 17.16B | 17.72B |
| Operating Cash Flow | 33.48B | 38.31B | 37.38B | 49.18B | 40.30B | 34.09B |
| Investing Cash Flow | -18.81B | -25.89B | -30.66B | -28.23B | -15.08B | 25.09B |
| Financing Cash Flow | -15.92B | -16.61B | -14.60B | -12.57B | -15.00B | -58.31B |
Sasol Technical Analysis
Positive
6.52
Price Trends
8.11
Positive
7.29
Positive
6.47
Positive
Market Momentum
1.06
Negative
81.02
Negative
95.40
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SSL, the sentiment is Positive. The current price of 6.52 is below the 20-day moving average (MA) of 9.57, below the 50-day MA of 8.11, and above the 200-day MA of 6.47, indicating a bullish trend. The MACD of 1.06 indicates Negative momentum. The RSI at 81.02 is Negative, neither overbought nor oversold. The STOCH value of 95.40 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SSL.
Sasol Risk Analysis
Sasol disclosed 41 risk factors in its most recent earnings report. Sasol reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Sasol Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $7.85B | 15.45 | 8.09% | 5.33% | -3.33% | -19.59% | |
68 Neutral | $22.52B | 14.71 | 33.60% | 2.71% | -12.98% | -11.34% | |
62 Neutral | $8.14B | 76.21 | 1.59% | ― | -6.73% | ― | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
59 Neutral | $24.02B | -18.77 | -6.63% | 12.78% | -19.65% | -157.13% | |
55 Neutral | $14.23B | -6.32 | -15.50% | 2.88% | -5.32% | -1108.29% | |
54 Neutral | $19.24B | -32.60 | -5.13% | 1.10% | -23.92% | 90.47% |
* Basic Materials Sector Average
SSL
Sasol
12.40
8.18
193.84%
ALB
Albemarle
163.26
87.56
115.66%
EMN
Eastman Chemical
68.76
-16.91
-19.74%
LYB
LyondellBasell
74.57
8.04
12.09%
PPG
PPG Industries
98.38
-10.02
-9.24%
WLK
Westlake Corporation
111.23
12.62
12.80%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.