Sasol reported higher annual earnings on Tuesday, helped by increased production at Secunda and Natref, higher Brent crude prices and better returns from refining fuel, despite weaker results from its gas and South African chemicals businesses.The energy and chemicals group’s adjusted earnings before interest, tax, depreciation and amortisation (ebidta) increased 17% to R60.7bn for the year to end-June, while HEPS rose 9% to R38.31.The result was supported by a 4% increase in sales volumes, a 7% rise in Brent crude prices and more than a doubling in refining margins as fuel prices improved. These gains were partly offset by a 7% stronger rand against the dollar.Sasol’s fuels business recorded the largest increase, with earnings before interest and tax (ebit) more than tripling to R19.9bn from R5.2bn. Higher sales volumes, crude prices, fuel prices and refining margins contributed to the result.Production at the Secunda operations increased 8%, supported by higher equipment availability and improved coal quality. Sasol said annual production reached its highest level in five years and exceeded its market guidance.Coal quality improved after its destoning plant began operating in December 2025. The company said the plant also reduced the amount of coal Sasol needed to buy from external suppliers.Production at the Natref refinery increased 76%, helped by improved operational reliability and Sasol’s use of capacity linked to Prax South Africa’s shareholding while Prax is in business rescue. Liquid fuels sales increased 13%, supported by higher production at Secunda and Natref and increased demand in mobility and commercial fuel markets.The higher fuel earnings were partly offset by lower earnings from gas and the South African chemicals business.Gas ebit fell 60% to R1.2bn as lower volumes, a stronger rand, higher methane-rich gas costs and higher cash costs and depreciation linked to the ramp-up of Sasol’s gas development in Mozambique weighed on the result.Mozambique gas production fell 7% as operational constraints, flooding and the natural decline of producing wells at Sasol’s existing Pande and Temane gas fields reduced output. This was partly offset by increased production from its newer gas development in Mozambique. South African gas sales to customers outside the group fell 8%, mainly because of lower demand after business closures.Sasol’s South African chemicals business swung to an ebit loss of R3.3bn from a R5bn profit a year earlier, weighed down by the stronger rand, higher feedstock costs, increased rehabilitation provisions and depreciation.Chemicals America recorded a 47% increase in adjusted ebitda, supported by stronger market conditions in the final quarter.Sasol recorded R16.8bn in impairments during the year. The largest charges were R7.7bn on the Secunda liquid fuels refinery, R3.8bn on the Mozambique gas development, and R3.7bn on polyethylene, which produces a type of plastic used in packaging and other products.The company said the Secunda refinery impairment was mainly linked to a stronger forecast rand against the dollar, which reduced the refinery’s estimated future value. This came despite the improvement in Secunda’s operating performance during the year.Sasol reduced net debt by 11% to $3.3bn, helped by cash generated from operations and lower capital spending. Capital expenditure fell 18% to R20.9bn as major gas feedstock and environmental projects were completed and the group did not have a Secunda shutdown during the year.Sasol did not declare a final dividend as its net debt remains above the $3bn threshold set out in its dividend policy. The policy provides for 30% of free cash flow to be distributed to shareholders once net debt is sustainably below that level.Free cash flow fell 5% to R11.9bn, mainly due to more cash being tied up in inventory and other working capital at year-end. The previous year also included a R3.1bn after-tax payment from the Transnet settlement. Excluding that one-off payment, free cash flow increased 26%.Sasol also disclosed weaknesses in its financial controls, including deficiencies in risk assessment, revenue recognition and information used to assess the value of assets. Management said it is implementing measures to address the weaknesses.Sasol brought a further 330MW of renewable energy capacity online during the year, taking capacity in operation to more than 500MW. The company said total secured renewable capacity through power-purchase agreements exceeded 1,350MW.Business Day