Sasol shares surge nearly 12% after strong first-quarter update

Sasol became the biggest mover on the JSE Thursday after a first quarter update showed it was making good progress on delivering its Capital Markets Day plans to strengthen the foundation business amid global macroeconomic instability, global tariff and geopolitical tensions.

The share price was trading 11.99% higher at R107.37 in the morning, a price that has risen sharply since as low as R53.01 in April 2025, before the fuels-from-coal and chemicals group announced strategies to revive its core businesses.

“Performance across all our business segments remains within market guidance, and we are making good progress towards delivering on our 2026 financial year financial targets,” Sasol’s directors said in the update.

In the Southern African business, the ramp-up of the destoning plant was progressing to plan, resulting in average sinks for the quarter to September 30, 2025, reducing below 14%, which enabled the phased start-up of previously closed low-quality coal sections and increased coal production through the quarter.

Successful destoning commissioning activities led to improved coal quality, which, with improved equipment availability at Seconda Operations (SO), resulted in higher SO production for the quarter.

Both the oil refinery Natref and Sasolburg delivered improved operational performance. Overall fuels sales volumes increased, while volumes in the higher margin mobility channel continued to grow in line with a sales mix optimisation strategy.

Chemical Africa sales volumes were flat, but revenue was lower due to lower sales prices associated with persistent market softness.

In the International Chemicals business, self-help margin optimisation helped drive revenue growth, supported by higher sales volumes in the US and strong pricing in Eurasia, underpinned by stronger palm kernel oil prices. There were weaker average sales prices in the US due to lower base pricing and product mix.

Earnings before interest, tax, depreciation, and amortisation (Ebitda) were significantly higher compared with the first quarter of the 2025 financial year, reflecting improved margins.

Sasol said it would ensure the supply of products from the Natref refinery remained uninterrupted, this after the receipt of a notice confirming that the refinery’s minority shareholder State Oil, the UK parent company of Prax South Africa, had been placed under administration.

The strategy to close or mothball certain plants was progressing to plan. Clean-up activities had been completed for the Alkyphenal plant in Marl, Germany, and the Guerbet Plant in Lake Charles, US, while production at the phenolics plants in Texas, US, and the HF LAB plant in Augusta, Italy, had been shut down in the first quarter.

The second of three new low carbon boilers was commissioned at Natref, with the third expected to be online in the second quarter.

The Southern African value chain breakeven oil price for the first quarter was in line with market guidance of $55 - $60 per barrel, supported by higher production volumes, disciplined cost and capital management. International Chemicals was on track to meet the adjusted EBITDA target of $450 - $550 million.

"Despite good progress in delivering against our operating targets, we continue to face macroeconomic headwinds, including recent tariff changes, which are impacting financial performance. As global markets adjust to tariff changes, we are actively assessing potential impacts on our operations, supply chain, and pricing strategies, and are engaging with industry partners and policymakers to mitigate impacts," the directors said.

BUSINESS REPORT