Sasol's Q4 2025: Key Contradictions in CapEx, Coal Strategy, and Debt Management Unveiled

Capital expenditure and strategic spending, coal purchasing strategy and impact on operations, capital expenditure strategy, debt reduction strategy, and coal supply and emission reduction strategy are the key contradictions discussed in Sasol's latest 2025Q4 earnings call.



Financial Performance and Cost Control:
- Sasol reported an adjusted EBITDA of ZAR 52 billion for the period, down 14% to ZAR 52 billion. Cash fixed costs were contained below inflation, with capital expenditure reduced to ZAR 25 billion, 13% lower than the target range.
- The company achieved a significant improvement in free cash flow generation, up 75% to ZAR 12.6 billion, contributing to a reduction in net debt to USD 3.7 billion.
- The cost control was driven by focused initiatives such as reducing headcount, optimizing capital spend, and implementing cost-saving measures.

Secunda Value Chain and Gasifier Improvements:
- The South African value chain breakeven was achieved at USD 59 per barrel due to disciplined cost management and improvements in gasifier performance.
- Despite lower volumes, the Secunda breakeven remained aligned with the previous target below USD 60 per barrel.
- Improvements in gasifier performance were attributed to operational adjustments and the completion of the destoning plant construction.

Renewable Energy and Emission Reduction Roadmap:
- Sasol's optimized emission reduction roadmap aims for a 30% reduction in greenhouse gas emissions by 2030, with progress achieved through various initiatives like turning down a gas boiler and purchasing carbon credits.
- The company secured 900 megawatts of renewable energy in South Africa, with additional facilities expected to come online in financial year '26.
- The development aligns with Sasol's strategy to decarbonize operations and support its transition to lower-carbon energy sources.

Chemicals and International Operations:
- International Chemicals reported adjusted EBITDA of $411 million, an improvement in adjusted EBITDA margin from 6% to 9%.
- The improvements were driven by market focus, asset optimization, and cost efficiency initiatives.
- Despite a challenging global chemical market, the company's reset phase and specific focus on value over volume strategy contributed to the positive results.