Company Performance - Oil States International (OIS) has gained approximately 99.7% year-to-date, significantly outperforming the Oils-Energy sector, which has returned an average of 19.3% [4] - OIS currently holds a Zacks Rank of 2 (Buy), indicating a positive outlook based on earnings estimates and revisions [3] - The Zacks Consensus Estimate for OIS' full-year earnings has increased by 1% over the past quarter, reflecting improved analyst sentiment [4] Industry Comparison - OIS is part of the Oil and Gas - Mechanical and Equipment industry, which has seen a year-to-date gain of about 28.9%, indicating that OIS is performing better than its industry peers [6] - In contrast, another Oils-Energy stock, Sasol (SSL), has returned 34.7% year-to-date and belongs to the Oil and Gas - Integrated - International industry, which is ranked 140 and has increased by 20.6% this year [5][7] Sector Ranking - The Oils-Energy group, which includes 234 companies, ranks 15 in the Zacks Sector Rank, which evaluates 16 different sector groups [2] - The Zacks Rank system is designed to identify stocks that may outperform the broader market over the next one to three months [3]

Core Insights - Sasol Limited is a global integrated chemicals and energy company listed on the NYSE under the symbol SSL, operating in mining, energy, and chemicals sectors [1] Financial Performance - On February 23, 2026, Sasol reported an earnings per share (EPS) of $0.578, slightly exceeding the estimated $0.576, indicating positive performance and the ability to meet market expectations [2] - The actual revenue for the period was approximately $7.63 billion, surpassing the estimated $7.55 billion, demonstrating effective operational strategies and market presence [3] Valuation Metrics - Sasol has a price-to-earnings (P/E) ratio of 13.40, indicating favorable market valuation of its earnings [4] - The price-to-sales ratio is 0.36 and the enterprise value to sales ratio is 0.68, illustrating the company's valuation relative to its sales and indicating investor confidence in its revenue-generating capabilities [4] Financial Stability - The debt-to-equity ratio stands at 0.79, suggesting a moderate level of debt, while the current ratio of 1.87 highlights the company's strong ability to cover short-term liabilities [5] - An earnings yield of 7.46% provides a comprehensive view of Sasol's financial health and investment potential [5]

Financial Data and Key Metrics Changes - The overall financial performance showed a decline in Adjusted EBITDA year-on-year due to weaker macro conditions, although free cash flow ended positively for the first time in four years, reflecting a more than 100% improvement from the prior period [9][23]. - Net debt ended at $3.8 billion, slightly above the full-year target, but the company remains on track to achieve net debt below $3.7 billion by year-end [7][22]. - Gross margin declined by 6%, impacted by a 17% lower Rand oil price and continued pressure in chemicals pricing, partially offset by stronger refining margins and higher sales volumes [23]. Business Line Data and Key Metrics Changes - In the mining segment, EBITDA was lower due to the phase-out of export coal sales, but additional income was realized from leasing coal terminal capacity [26]. - Fuels EBITDA increased, supported by higher refining margins and improved operational performance at Secunda and Natref [27]. - Chemicals EBITDA generation remains under pressure across Africa and America due to lower prices and weaker margins, while Eurasia saw margin improvement [27]. Market Data and Key Metrics Changes - The Brent crude oil price decreased by 14% year-on-year, contributing to a 17% decline in the Rand oil price [16]. - The oil market remains in surplus, with supply growth outpacing demand, leading to expectations of continued price volatility [17]. - Chemicals markets are facing global overcapacity and softer demand, which are weighing on pricing and margins [18]. Company Strategy and Development Direction - The company is focused on a two-pillar strategy: strengthening the foundation business and positioning for long-term growth and transformation [2][3]. - Progress has been made in renewable energy, with over 1.2 gigawatts secured in South Africa, moving towards a target of 2 gigawatts by 2030 [30][31]. - The company is also pursuing carbon offset initiatives and sustainable fuels, aiming to create additional pathways for growth and value creation [34]. Management's Comments on Operating Environment and Future Outlook - The management acknowledged the volatile business environment and emphasized the importance of safety and operational delivery [4][5]. - There is cautious optimism for recovery in selective end markets, although the pace of decline in chemicals is slowing [18]. - The management remains committed to improving cash generation, disciplined capital allocation, and proactive risk management [28]. Other Important Information - The company invested approximately ZAR 200 million in social programs over the past six months, reflecting its commitment to positive social impact [14]. - The company has secured a EUR 350 million grant for a sustainable aviation fuel project in Germany, supporting its long-term growth strategy [34]. Q&A Session Questions and Answers Question: Synfuels volumes and guidance for the next financial year - Management noted that the annualized run rate in the second quarter was about 7.6 million tons, and while maintenance is scheduled, they are optimistic about achieving top-end guidance sooner than expected [41][43]. Question: Carbon tax suspension proposal - Management emphasized the importance of a carbon tax for protecting local industries and proposed a carbon tax recycling mechanism to support the transition to lower emissions [45]. Question: CapEx and de-gearing guidance - Management confirmed the guidance to reduce net debt below $3.7 billion by year-end, despite challenges in the macro environment, and noted that the increase in CapEx is due to specific projects progressing [56][61].

Financial Data and Key Metrics Changes - The overall financial performance showed a decline in Adjusted EBITDA year-on-year, reflecting weaker macro conditions, with a positive free cash flow generated despite challenges [9][16][23] - Net debt ended at $3.8 billion, with a focus on cash generation and resilience in the balance sheet [7][22] - Gross margin declined by 6%, impacted by a 17% lower Rand oil price and continued pressure in chemicals pricing [23] Business Line Data and Key Metrics Changes - In the mining segment, EBITDA was lower due to the phaseout of export coal sales, but additional income was realized from leasing coal terminal capacity [26] - Fuels EBITDA increased, supported by higher refining margins and improved operational performance at Secunda and Natref [27] - Chemicals EBITDA generation remains under pressure due to lower prices and soft demand in global markets, with a notable decline in both Africa and America [27] Market Data and Key Metrics Changes - The Brent crude oil price decreased by 14% year-on-year, contributing to a 17% decline in the Rand oil price [16] - The oil market remains in surplus, with supply growth outpacing demand, leading to expected volatility in oil prices [17] - Chemicals faced challenges from global overcapacity and tariff uncertainties, impacting pricing and margins [18] Company Strategy and Development Direction - The company follows a two-pillar strategy: strengthening the foundation business and positioning for long-term growth and transformation [2][4] - Progress in renewable energy includes securing over 1.2 GW in South Africa, with a target of 2 GW by 2030 [30][31] - The focus on decarbonization is pragmatic, aiming to reduce emissions while ensuring energy security and affordability [30][33] Management's Comments on Operating Environment and Future Outlook - The management acknowledged the volatile business environment and emphasized the importance of execution and delivery against commitments [4][5] - There is cautious optimism for recovery in selective end markets, although the pace of decline in chemicals is slowing [18] - The company remains committed to reducing net debt and improving cash generation despite macroeconomic uncertainties [22][28] Other Important Information - The company invested approximately ZAR 200 million in social programs over the past six months, reflecting its commitment to community upliftment [14] - The company has made significant progress in safety measures, with improvements in leading indicators despite a tragic fatality [8] Q&A Session Questions and Answers Question: Synfuels volumes and guidance for the next financial year - Management noted that the annualized run rate in the second quarter was about 7.6 million tons, with maintenance scheduled next year [39][42] Question: Carbon tax suspension proposal - Management emphasized the importance of a carbon tax for protecting South Africa's interests and proposed a recycling mechanism for the tax [40][44] Question: MRG pricing submission and its impact on revenue - Management confirmed that the submitted pricing would be slightly more expensive than current gas, with CapEx included in the overall profile [41][46] Question: De-gearing guidance and CapEx concerns - Management reiterated the commitment to reduce net debt below $3.7 billion by year-end, despite challenges in the second half [55][61] Question: Medium-term notes repayment strategy - Management explained the decision to repay medium-term notes was part of a proactive approach to capital structure management [56][64]

Financial Data and Key Metrics Changes - The overall financial performance showed a decline in Adjusted EBITDA year-on-year, reflecting weaker macro conditions, with a gross margin decrease of 6% due to a 17% lower Rand oil price and continued pressure in chemicals pricing [8][24][25] - Net debt ended at $3.8 billion, slightly above the full-year target, but the company remains on track to achieve net debt below $3.7 billion by year-end [6][23] - Free cash flow ended positive for the first time in four years, with a more than 100% improvement from the prior period [24] Business Line Data and Key Metrics Changes - In the Southern Africa value chain, mining EBITDA was lower due to the phaseout of export coal sales, but additional income was realized from leasing coal terminal capacity [26] - Fuels EBITDA increased, supported by higher refining margins and product differentials, with improved operational performance at Secunda and increased utilization at Natref [27] - Chemicals EBITDA generation remains under pressure across Africa and America, reflecting lower prices and weaker margins, while Eurasia saw margin improvement due to a value-over-volume strategy [27] Market Data and Key Metrics Changes - The Brent crude oil price was down 14% year-on-year, contributing to a 17% decline in the Rand oil price, with the oil market remaining in surplus [16][17] - The macroeconomic environment remains volatile, with geopolitical uncertainty expected to persist, impacting oil price volatility [16][17] Company Strategy and Development Direction - The company follows a two-pillar strategy: strengthening the foundation business and positioning for long-term growth and transformation [2][3] - Progress has been made in renewable energy, securing over 1.2 gigawatts in South Africa, with a target of 2 gigawatts by 2030 [6][31] - The focus is on decarbonization while safeguarding energy security and affordability, with a commitment to value-accretive pathways [31][34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macro environment but emphasized improvements in cash flow generation and operational execution [16][24] - The company is optimistic about achieving its ramp-up towards FY 2028, with ongoing restoration programs for gasifiers showing promising results [48] - There is cautious optimism for recovery in the chemicals market, with selective end markets stabilizing [17][27] Other Important Information - The company invested approximately ZAR 200 million in social programs over the past six months, reflecting its commitment to long-term value creation and positive social impact [14] - The company has secured a EUR 350 million grant for a sustainable aviation fuel project in Germany, supporting its growth in sustainable businesses [34] Q&A Session Questions and Answers Question: Can you comment on Synfuels volumes and guidance for the next financial year? - Management indicated that the annualized run rate in the second quarter was about 7.6 million tons, with maintenance scheduled next year, and emphasized the importance of coal quality and gasifier maintenance in achieving guidance [40][42] Question: What is the company's view on the proposed carbon tax suspension? - Management expressed that while the carbon tax was instituted to protect against external tariffs, they advocate for a recycling mechanism to support the transition to lower emissions [44] Question: How does the company plan to manage its de-gearing guidance amidst a stronger rand and lower refining margins? - Management confirmed the commitment to reducing net debt below $3.7 billion by year-end, emphasizing free cash flow generation and strict cost control [56][62]

SASOL LIMITED Interim Financial Results 23 February 2026 Copyright ©, 2026, Sasol AGENDA Strengthen our foundation Business overview Simon Baloyi Financial performance Walt Bruns Grow and Transform Copyright ©, 2026, Sasol 2 Disclaimer - Forward-looking statements Sasol may, in this document, make certain statements that are not historical facts that relate to analyses and other information which are based on forecasts of future results and estimates of amounts not yet determinable. These statements may als ...

Core Insights - Sasol Limited (NYSE:SSL) is identified as one of the undervalued chemical stocks to consider for investment according to hedge funds [1] - Goldman Sachs downgraded Sasol from Buy to Neutral, setting a price target of ZAR 118, citing a weak product price outlook that may limit earnings revisions in the near term [2][3] Financial Performance - Sasol revised its FY26 fuel sales outlook upward to a growth of 5–10% compared to FY25, an increase from the previous forecast of 0–3%, supported by stronger Natref performance and additional production from Prax South Africa [4] - Gas production volumes were revised down to a range of 0–5% below FY25 due to delays and softer demand, while global chemical revenues remain pressured [5] Operational Highlights - The destoning plant in Southern Africa reached beneficial operation in December 2025, with average sinks tracking the lower end of the 12%–14% guidance range, marking a significant milestone in coal quality enhancement [4] - Chemicals Africa showed slight sales volume improvements supported by operational gains, with further ramp-up expected in the second half of FY26 [5] Company Overview - Sasol Limited is a South African energy and chemical company that produces fuels, chemicals, and energy solutions, focusing on innovation and sustainability while exploring advanced technologies to optimize production and reduce environmental impact [6]

Market Overview - Investor sentiment is negatively impacted by concerns over risky private loans and rising oil prices due to escalating tensions between the United States and Iran, leading to expected market volatility [1] - Amid these fears, low-beta stocks are recommended as potential investment options [1] Low-Beta Stocks - Cboe Global Markets, Inc. (CBOE) is experiencing growth in options trading, which is increasing fee revenue and profits, supported by strong financials and low debt [6][9] - AngloGold Ashanti is benefiting from strong cash flow generation, increasing margins, and a disciplined capital framework, with ongoing growth projects enhancing earnings durability [7][9] - SK Telecom is focusing on AI infrastructure and digital transformation, positioning itself to create long-term shareholder value [10][9] - Sasol Limited has an integrated business model with a strong emphasis on energy transition while maintaining competitive and sustainable returns [11]

Industry Overview - The chemical industry is valued between $800 billion and $900 billion and is a crucial part of the US industrial sector, employing over 900,000 people across more than 14,000 industrial sites in 2023 [1] - The industry produced over 70,000 chemical goods and attracted foreign direct investment (FDI) of approximately $766.7 billion [1] Specialty Chemicals Market - The U.S. specialty chemicals industry is projected to reach $225.03 billion by 2025 and grow to $317.55 billion by 2033, with a compound annual growth rate (CAGR) of 4.43% [2] - Growth is driven by the demand for sustainable and high-performance chemicals, particularly in automotive, electronics, construction, and personal care sectors [2] Market Segmentation - Coatings and paints are expected to hold the largest market share in 2025 at 28.45%, while catalysts are anticipated to grow at the fastest rate of 7.21% CAGR [3] - Automotive applications account for 31.62% of the market, with personal care expected to grow at 8.03% CAGR [3] - Granules are projected to grow at 7.45% CAGR, while liquids will have the largest share by form at 40.13% [3] End-Use and Distribution - Manufacturing constitutes 35.27% of end-use, with healthcare expected to be the fastest-growing sector at a CAGR of 7.88% [4] - Direct sales account for 38.44% of distribution, while internet retail is projected to grow at the fastest rate of 8.12% CAGR [4] Regional Insights - North America is expected to dominate the specialty chemicals market in 2025 with a 32.47% share, driven by industrialization and strong demand across key sectors [5] Investment Opportunities - The methodology for identifying undervalued chemical stocks involves filtering stocks with a forward P/E ratio of 20 or less and ranking them based on the number of hedge fund holders [7] - Research indicates that mimicking top hedge fund stock picks can lead to market outperformance [8] Company Highlights - **Sasol Limited (NYSE:SSL)**: - Number of Hedge Fund Holders: 13 - Forward PE Ratio: 5.34 - Goldman Sachs downgraded SSL from Buy to Neutral, citing a weak product price outlook [10] - FY26 fuel sales outlook revised upward to 5–10% growth compared to FY25 [12] - Focuses on innovation and sustainability in energy and chemical production [14] - **Cabot Corporation (NYSE:CBT)**: - Number of Hedge Fund Holders: 23 - Forward PE Ratio: 12.08 - UBS raised CBT's price target to $81 from $74, maintaining a Neutral rating [15] - Announced availability of circular reinforcing carbon production in the Asia Pacific region [16] - Focuses on sustainability and advanced materials for various industries [18]

Core Viewpoint - Sasol Limited is expected to report a significant decline in financial performance for the six months ended December 31, 2025, with adjusted EBITDA projected between R19 billion and R23 billion, a decrease of 4% to 21% compared to the prior period [1] Financial Performance Summary - Adjusted EBITDA is anticipated to be between R19 billion and R23 billion, down from R24 billion in the prior period, reflecting a decrease of 4% to 21% [1] - Headline earnings per share (HEPS) is expected to range from R8.50 to R10.00, a decline of 29% to 40% from R14.13 in the previous period [1] - Earnings per share (EPS) is projected to be between R0.10 and R0.80, representing a drastic decrease of 89% to 99% from R7.22 in the prior period [1] Factors Influencing Earnings - The decrease in earnings is primarily attributed to impairments totaling R7.8 billion (before tax), compared to R5.7 billion in the prior period [1] - A 3% decrease in the average US dollar per ton chemicals basket price contributed to the earnings decline [1] - A 17% decline in the average Rand per barrel Brent crude oil price also impacted earnings negatively [1] - The decline in earnings was partially mitigated by disciplined cost management and a 3% increase in sales volumes due to improved operational performance [1] Impairment Details - Significant impairments include R3.9 billion related to the Production Sharing Agreement (PSA) development in Mozambique, influenced by a revision of the expected production profile and the strengthening of the Rand against the US Dollar [1] - The Secunda liquid fuels refinery cash generating unit remains fully impaired, with R3 billion in capitalized costs impaired during the current period [1] Cash Flow and Expenditure - Overall free cash flow generation is expected to improve compared to the prior period, despite lower earnings, due to reduced capital expenditure [1]