Investment idea: Sasol - 9 July 2025

On 20 May 2025, Sasol held a Capital Markets Day, providing a comprehensive update on its corporate strategy, operational performance, emissions reduction roadmap, and financial framework. Some key highlights are:

• Sasol anticipates adjusted its EBITDA to rise from R60 billion to a range of between R64–R71 billion by FY28.

• Cost savings of R10–R15 billion (relative to inflation) are a major contributor to this EBITDA growth, which is targeted for achievement by FY28.

• The company maintains its net debt ceiling target below US$3 billion, reflecting a disciplined financial approach.

• Capital expenditure is set to be reduced by R15–R20 billion compared to previous guidance, underscoring Sasol’s focus on efficiency.

• The Chemicals segment is targeting an EBITDA margin of at least 15% by FY28, with positive cash flow before financing costs projected for FY25. This will result from operational streamlining, the closure or exit of underperforming assets, and a shift from volume-driven to value-driven strategies.

• For mining operations in South Africa, priorities include restoring Secunda production to 7.4 million tons per annum or higher and reducing the oil breakeven price to $50/bbl by FY28 (1H25: just below $60/bbl). Key initiatives include improving coal quality through destoning and X-ray sorting, implementing real-time coal quality testing, and delivering sustainable cost reductions of R8–R10 billion by FY28.

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