Good morning, and welcome to Sasol Limited's Financial Year 2023 Results Presentation. Thank you for taking the time to listen to our announcement today. My name is Tiffany Sydow from Investor Relations. And with me today is Fleetwood Grobler, President and CEO of Sasol and Hanré Rossouw, Chief Financial Officer. Fleetwood will start today's presentation with an overview of the business performance. The financials will be covered in more detail by Hanré, and Fleetwood will conclude with a brief update on our strategy. The Q&A session will commence immediately thereafter, where you will have an opportunity to ask your questions via the webcast or teleconference facility. I'd now like to refer you to our forward-looking statement on the slide. This contains important information regarding statements that are made in this presentation. Please have a look at it in your own time. I will now hand over to Fleetwood to commence today's presentation.

Good day, everyone, and welcome to our annual financial results update for 2023. To frame our performance for the period, there is a distinct set of factors which contributed. We continue to face macro challenges with headwinds on demand and pricing, particularly in the chemicals alongside persistent inflation with elevated feedstock and energy costs. We are also encountering specific challenges in our operating environment, notably in South Africa, where we have been impacted by the performance of state-owned enterprises. However, in addition to benefiting from an elevated oil price and a weaker rand-dollar exchange rate, we've also seen real progress in the mitigation actions that we have taken in the areas within our control. This is driving better performance in areas like Secunda operations, amongst others, more resilience with the ability to reset to more aggressive targets on Sasol 2.0 following recent outperformance and progress towards the longer-term goals. Given this backdrop, our financial results for the year is reflective of these mixed factors. One particular noteworthy impact is evident in the significant impairment on the Synfuels liquid fuels refinery. Suffice to say that in Secunda operations, the various chemicals cash-generating units in the integrated value chain still show significant headroom. Hanré will discuss this in more detail later. More broadly, the cost and operating challenges we have faced and have required us to reassess the steps we need to take to ensure Sasol remains a sustainably profitable organization. We are taking stock of our current reality while intensifying our attention on priority actions to deliver on the reset phase of our strategy. We need to remain realistic and focused on delivery as we head into another financial year. As with previous results presentations, I will start by covering some of the business highlights for the year across our people,…

Thank you, Hanré. In the final section of my presentation, I will talk you through our strategy, the progress we've made on our sustainability journey our continued contribution to society and our priorities for the next financial year. For the past year, we have seen extraordinary volatility in the global landscape and there are a number of important underlying factors which are relevant to our transition. Energy Security continues to be a source of great concern across the globe. With energy prices spiking after the war broke out in the Ukraine in early '22, while we've seen a slight reprieve in some of these energy costs in the last six months, availability and affordability of energy remains a key issue. Regulatory and policy uncertainty is also a critical factor. Consistent and effective policy and regulation is required both to encourage investment and reward risk taking in the Pathway 2 transition. Unfortunately, some of the more recent developments in the broader South African business have instead created more uncertainty that add to the challenges of investing with confidence towards transition. We remain committed to prioritizing an affordable and sustainable transition for our business. We are faced with what is commonly known as the energy transition trilemma. And it is imperative that we invest in the energy transition itself. But simultaneously, also consider our commitments to today's energy needs largely shaped by oil and gas. Swift action is required, but we must equally recognize the importance of our means and affordability of this transition. We've seen a few shifts in strategy from our peers in the recent months in response to some of these challenges with most reaffirming the need for a value-accretive and demand-driven energy transition. Our triple bottom line strategy, people, planet profit remains intact. Looking now at our environmental…

Good morning, and welcome to the question-and-answer session for Sasol's 2020 final financial results. With us today in the room are to my left, Priscillah Mabelane, EVP of the Energy Business, to my far left, Simon Baloyi, Energy EVP of the Energy Operations and Technology, Stream. To my right, Mr. Riaan Rademan, who is the EVP of the Mining Operations and to my far right, Brad Griffith, EVP of Chemicals. Participating online, we also have three participants Charlotte Mokoena, our EVP of HR, and Stakeholder Relations. Vuyo Kahla, EVP of Strategy, Sustainability, and Integrated Services and also Hermann Wenhold, who's our current SVP of Mining. Your questions can be posted online, via the streaming platform on the right hand side of the screen, you should see a dialogue box, which you can post your questions. Alternatively, you can also dial in via the Chorus Call link, which was provided and you can voice over your questions via a queuing system. I'll be switching between the two platforms to allow everybody a fair opportunity to ask their questions. We've taken the liberty of theming the questions to make the sessions slightly more efficient today. I'll start with a few of the online questions which have come in via the webcast platform. And I think let's start with the financial questions, which I'm going to direct to Hanré. I'll perhaps do two questions at a time, Hanré. The first one talking through the earnings impact going forward of the massive impairment, and the depreciation impact by annum, that comes from Herbert Kharivhe at Investec. I think a key question there also, are we still looking at 2050 as the useful life? And then, the second question also from Herbert Kharivhe, is the oil book, hedge book reflective of breakeven prices? Hanré Rossouw:…

Thank you, Hanré. Another two questions coming in, one from [Ashton Donberg from Novus ARC]. How much of a premium in dollar per barrel did you pay to source crude oil? And then I think a couple of questions around, gas from Sashank Lanka at Bank of America. A couple of questions, investment of the ZAK 530 million in Mozambique gas drilling. How will this be reflected in CapEx over the coming years? Yearly CapEx arising for this, and then I think also moving back to the impairment, is there more to come on the Secunda CGU impairment, and how much lower volumes be post 2030? Is Sasol now running the refinery as a terminal value asset and are there any potential impairments in the Eurasia segment given the weak outlook there? A couple of questions in one. Hanré Rossouw: It's a mouthful, so please remind me if I miss anything, Tiffany. I think just on the premium on the hedge book, just to note that we've not continued the use of cap and collar in terms of hedging. So we are now only using put options. So the question relates to what is the premium that we pay on those hedges. So that -- for the last financial year and currently, it's hovering around the $2 to $3 a barrel. So effectively, it's an insurance cost that we expense, to cover that downside risk on oil. In terms of the Mozambican oil, just to note that that $530 million investment that Fleetwood quoted, that is the amount already spent. We're, just about halfway through our investment program in Mozambique. So the peak period would be over the next two to three years, whereafter that will decline or not, I think of course it is a continuous capital allocation discussion. So as we see prospectivity improving, we might accelerate that or decelerate that, depending on the exploration results, but we do believe that there's lots of potential in terms of gas from Mozambique. Did that cover everything, Tiffany?

Yes, I think just on the potential impairments on Eurasia? Hanré Rossouw: So on Eurasia, I think and perhaps just a comment on impairments in general, and at risk of seeking out on IFRS and accounting standards, one has to recognize that that impairments are reactive to an extent. We do on an annual basis assess the carrying value of our assets. So where they're is limited headroom in some assets, we will watch that closely. But when we see improvements in our business that - could potentially reverse an impairment, and we saw that in the decimalization business, we reversed an impairment, kind of we will do that as well. So that that assessment will happen annually perhaps just to note on Secunda, we - in the financial statements at Note 8, give a lot of detail on what drives the impairment. A big aspect of that has been a reduction in the macro assumptions for example, the Brent oil price is now down to $88 a barrel over the long-term. WACC rates have increased and we note the sensitivities on those. And then also, we don't include any enhancements due to IFRS. You - cannot include an announcement until it's affected. So, we'll continue to look at options, not only for our chemicals business. But also Secunda in terms of where we can reverse those impairments, and we see that as a challenge for us in the business. And I think that really talks to the longer term, transition strategy as well, that we are driving.

Thank you, Hanré. That covers the full suite of questions. I'm going to move to operationally, operational questions from a few people. So the first one comes from Gustavo Campos at Jefferies. How would you evaluate the overall impact of Eskom and Transnet constraints for this fiscal year? And how do you see those potential challenges going forward? And then the second question also from Sashank Lanka from Bank of America, what should be the mining productivity once the full rollout is done. And for the overall business, what is the upside to '24 volumes we can expect on a normalized basis? Fleetwood?

Thank you, Tiffany, and thank you for those two questions. So let me contextualize the impact we've seen in our chemicals business, for example, with respect to state owned enterprise impact. So when I look at the two aspects that, impacted chemicals, one was that we couldn't move the product to the coast or the port and therefore we either lost the sale or delayed it substantially. And the other aspect is that we had to move the product from rail to road. Now that in itself, the latter increased our logistic cost by 27%. And that also incurred, and we've - we said most of that was in the first half of the year around ZAR 0.7 billion. If I include the first element. It was just over ZAR 1 billion that we have, seen as an impact on our chemicals Africa bottom line because of these two factors that - I've indicated. Now we are, and I've mentioned it in my presentation, that we are actively engaging, and we've got constructive engagements, also with Transnet and Portnet on various issues. One of the aspects that we are dealing with is our trajectory between Sasolburg and Secunda with respect to ammonia rail tank cars. Where we have worked with them jointly to put more rolling stock under Sasol's, watch into that trajectory as well as that we assist with the maintenance of that rolling stock. Of course, these are ongoing discussions, but we are encouraged by the collaboration that we've seen, and we've also seen improvement in the last months with respect to some of the other rail trajectories, to either Richards Bay or into the port of Durban. So I think, we're looking forward towards an improvement. I think the government is doing and pulling all stops to…

No, Fleetwood I fully agree with you the, I think as said in the presentation, we've seen some very good upside thus far and we believe the 1,238 will be the number. Thank you.

Thank you.

I think, additional questions on the operational front, Fleetwood from [indiscernible] has the issue of West African crude, which was bought at a premium and a half, one being resolved, and how would you look at mitigating this risk in future? And then I think we have another question also from Adrian Hammond on the related again to the impairment, but, what is the, sorry, the coal improvement project and what should we expect in terms of Synfuels volumes at steady state?

Yes. I'm going to ask Priscillah to weigh in on the on the crude part, and I'll start off with, with our operations in Secunda and then ask Simon to weigh in as well on that one. Now all the interventions, we've guided now that we are focusing on the 7.1 million to7.3 million tonnes out of Secunda. We all know that is not full potential or what we've proven in the past. The unlock to increase beyond that is the deployment of technology to improve the coal quality through destoning. And of course, that is our target to get back to higher production volumes, but we have to implement this technology, and it will take capital and time. And we, hopefully, we can address that, context or perspective of what it entails during our September, market operational update, that we hopefully will see most of you in Secunda at that time. So I hand over to Priscillah and then Simon.

Thank, Fleetwood. In the first half of the year, we highlighted that the [indiscernible]. So that has set to come down in the fourth quarter of this year. The second part of that is also in terms of -- some of our processes, [indiscernible] we are testing a number of matters to ensure that we can actually [indiscernible] and that necessitates [indiscernible] So at this stage, we are going -- so that is like a piece at the right time, we'll be able to be sorting forward. Beyond that, we've [indiscernible].

Thank you. Simon.

Yes. Thank you, Fleetwood and Adrian. We're going to continue on our volume improvement to focus on both the, internal mitigation. I think we've previously spoken about the steps taken and to that end, I want to really thank team Sasol across the entire value chain for collaborating to, deal with the impact that was holding us back. So, we are confident that at least in the next financial year or two, we'll remain within the 7.0 to7.3 market guidance. And in the long-term, once we've resolved all the coal quality interventions that's indicated by Fleetwood during his presentation. Our guidance will be 7.5 million tonnes plus we confidently think we can go and be that steady state.

Apologies or there seems to be sound a problem with sound, there's a request for Priscillah to please just, repeat her answer from before, if you wouldn't mind, please. Okay. I think while we are waiting for that, I think perhaps we can go to the, next question. I think a question for Hanré in the meantime. Could you comment on the gearing targets, either dollar debt or gearing ratio across the group as well as the regional breakdown SA versus international? International costs are up material, and are there any opportunities to lower, optimize the cost of debt capital now that liquidity has improved that comes from Irina Schulenburg at Old Mutual. Hanré Rossouw: Thanks. Thanks, Tiffany. So, I think perhaps to start off with the conundrum of U.S. dollar denominated debt versus what it effectively now is 97% of our EBITDA coming from South Africa in the last year. Of course, that is a bit of a hangover from kind of the funding of LCCP, and we sit at the moment with 500 - sorry, US$5.5 billion of U.S. dollar denominated debt. So, I think critical to that is the ramp up and recovery of our offshore business to repay that debt. But then we're quite comfortable then also at the appropriate time to translate kind of rand into dollars to repay it. So that will be a continued a balance to just affect a more, kind of more balanced debt - a debt book that matches our cash flow with our debt. And ultimately, the intention then is to reduce the dollar debt use more DMTN, other South African denominated debt products, to align that. But that will be a project that runs over a number of years to rebalance that. I think in terms of debt targets, we're quite comfortable still with the capital allocation framework. One looks at the, the debt targets for dividend payment. We note that on a first order capital allocation that we committed to paying a dividend whilst debt is under $5 billion. Under US$4 billion, we stepped the dividend payment up further. And I think ultimately, the current - absolute level of debt and a net debt to EBITDA ratio of about a one and a half times net debt to EBITDA is comfortable. I think effectively, aiming for debt metrics that effectively puts us in investment grade rating to ensure, that we get a good access to the dollar effectively the dollar denominated capital markets.

Thank you, Hanré. Priscillah - the question, apologies again could you just address on the crude premiums.

Thank you. Is that working now? Okay. Thanks. Thanks, Tiffany. Just probably I'll first practice. Let me just summarize it into three buckets. I think at year at half year end. As we indicated that the crude prices or the diffs were actually driven by macro as part of that, as we've seen in terms of the spike in terms of the diesel cracks. We've seen that softening in the fourth quarter and year-to-date for the new financial year as well. So that has actually helped us to improve some of the, differentials that we're paying on WAF. In addition to that, we've highlighted that we are working on piloting and broadening our crude slate. We've made good progress. We are currently looking at different crudes when testing a WTI Crude. We'll take learnings from that. And if it's efficient, we'll be able to broaden that. But as we move forward, we will be looking at different supply sources, at a global scale. The - third issue that we also highlighted was that - we're also looking at strategic partnerships, because we do understand that a scale is not necessarily able to and - enabling us to achieve significant margins. So we are piloting a six months arrangement with a strategic partner, depending on the outcome, we'll do a retro analysis and if you think there's value proposition, then we'll look at that going forward. Those are the three initiatives that we are looking at. I just want to reiterate that in the fourth quarter, and year-to-date, we are seeing significant improvement in terms of the diffs that we are paying for the service the first three quarters of the year.

Thank you, Priscillah. I'm going to switch to Chorus Call as there are a few, callers that are queued. If I could perhaps ask the Chorus Call operator to go to Gerhard Engelbrecht first and then we'll take Chris Nicholson next.

Of course. Gerhard, you can go ahead, sir.

Gerhard, can you, bring through your questions?

Sorry, yes. Can hear me?

Yes. We can hear you clearly. Go ahead. Gerhard, we're unable to hear you. Do you want to try again?

Is that is that better? Can you hear me now?

Yes. Please go ahead.

I call it off. Okay. So I've got three questions. Two around the payment and one around the future of gas and LNG. If I look at your exchange rate assumption or your oil price assumptions of $88 and above average refining margins and currency. It looks like the front end of your DCF is loaded with very strong cash flows, which must imply that later in your DCF, you're turning to very large negative cash flows. To get to zero values. I guess the question is when do you see that happening first? So when do you see these negative cash flows coming through in the fuels business? My second question goes around the 35 billion. I looked at the asset values in FY '22, and what you ended up with FY '23. You've been paid more than the asset value, than - the asset values that you ended with in FY '22, but I also see that the property plant and equipment in the mining business has been cut quite significantly. Have you allocated assets differently or is there also any payment in the mining business? That you're taking in the fuels business. And then my last question goes around gas. You say that LNG is no longer an option. Are you still pursuing the gas ET exchange reforma project in Secunda with that on the back burner as well. And until when do you think you'll be able to supply external customers with gas? Your gas plateau does that include external supplying external customers? Thank you. Hanré Rossouw: Thanks. I'll jump in with the first two parts of that question. I think Gerhard you've - as normally spot on, certainly in terms of the negative, cash flows in later years that I think given that we produce, and generate strong cash flows in the near term, we indeed have a tale of negative cash flows. We see that coming through post 2030, as noted also that the key part of that is the step down then in production, assumptions for Secunda moving from around 7.5 million tonnes to 6.7. Not being able to recover that from gas given the increase in the cost of gas in our assumptions base. Just on your question, also in terms of the carrying value of assets. So yes, we do also, given that the impairment, is not just for the Secunda assets, but it looks at a cash generating unit. There are allocations of other assets into the various cash generating units. So, there is an element of mining and gas, and other assets allocated to that cash generating unit. So proportionally, if you spot on that will also then - the impact and of course, also capital throughout the year that we've spent since the half year, and the beginning of the year and - the half year impairment is also impacted. So that's - why you see that in the property, plant and equipment, in balances for the year.

Thanks Hanré. Sorry, if I just, so are you confident that the chemicals business can generate enough cash flows to offset these large negative cash flows in the longer term? Hanré Rossouw: I think - that's a critical point, Gerhard. In terms of - and we noted that that in the chemicals cash generating unit, South African cash generating unit, we've got significant carrying value still, and significant headroom. So given the higher value products that we produce in that business, we still believe that that business is, carries a lot of value, and it's important to note that kind of where we have different cash generating units we've got an integrated value chain. So, these will always, offset each other and that's really the reason why we continue with the 2050 useful life, that even though there's negative cash flows from the fuels business, we still see significant value in the chemicals business then, and one has to look at the complete picture, as you point out.

Gerhard, I'll ask, Simon to reflect on the gas reforming projects and then Priscillah to weigh in on the external gas customers. So, Simon?

Yes. Thank you, Fleetwood. Gerhard, yes, you correct the gas heated exchange reform, as that project we have put it on hold, but we are watching the [indiscernible] cost, it purely depends on affordability of the gas. So of course, we will not bring in gas and do the projects to destroy value, but it has to be really attractive. So what we're going to do as we explore and find cheap gas, we might restart those projects.

In terms of the $530 million that we mentioned earlier on, $330 million of that have been spent today on restoring our plants. So we've been in discussions with customers explicitly so to indicate that Sasol Gas, which has been investing in the PPA is not able to extend and afford gas supply from FY '26 onwards. At the same time, previously, we've also communicated to our customers that the methane-rich gas will actually be phased out by FY '26 because we need that gas for the decarbonization of our own operations. And in parallel, what we are actually doing is that we are engaging with customers to see how best we can look at alternative sources. It's very clear as has already been highlighted by Hanré and Fleetwood earlier on, but at this current price, Sasol cannot afford LNG, but we do believe that a collaborative approach with our customers to look for alternative solutions will enable us to get perhaps gas into the future at a later -- at a better pricing. From our side in terms of, Sasol Group Limited, we continue to look at other opportunities and invest in terms of that on the exploration, as well as the current project that we are making, we're making progress on as Fleetwood mentioned in terms of PSA.

Thank you.

Thank you, Chris. Operator, if we can move to Chris Nicholson, please?

Of course. Chris Nicholson from RMB Morgan Stanley. You can go ahead, sir.

Hi, morning. Yes. I'd like to just, continue along the line of questioning around the impairment. So it is a bit - if risky, but it is important as it signals, I get a few assumptions around future volumes and so forth. You mentioned a couple of questions around this. You mentioned in the release that you're now assuming 6.7 million tonnes from Synfuels going forward. Could I understand, would that ratio between liquid fuels and chemicals be roughly similar to what is currently produced or if there's any difference in how the turndown occurs there? That's the first question. The second question then, looks at coal volumes. So clearly you've highlighted that LNG, is not affordable. What does this imply for the total coal volume that Synfuels will require kind of post-2030 to support that 6.7 million tonne run rate. And then finally, I know we've obviously had some news flow recently around the alternative load based submissions for SO2. I do understand that there potentially could be a production impact if the Minister of Environmental and Fisheries doesn't give you, for the right to, I guess, reduce the total load based submissions from 2025 or before 2030. Could the production impact be, that we see in the turndown be quicker an anticipated from that 6.7. Could we get there quicker? Thank you.

So, Hanré, maybe you deal with the first part, and then I'm going to ask Simon to deal with the what is the required call volume at 6.7 and what is the reduction as well as the impact of 12A? Hanré Rossouw: Thanks Chris for the questions. I think to start off with the ratio of chemicals versus fuels, so there's no significant change on those assumptions. But I think that's part of the mitigation measures in terms of changing production mix optimizing the production slate is going to be key part of recovering that that value. The coal volume, so that, and I think let's just take a step back in terms of the impairment. I think key aspect, of course, is our 2030 emissions target of 30% reduction And I think as we've explained previously, the key element to doing that is to move from - coal to gas as an intermediate feedstock. And as such, we are still committed, and part of the plan is still going to move from around 40 million tonnes of coal to around 30 million tonnes of coal, the affordability of gas will really then determine how much we can recover. So effectively, kind of the easiest way to just reduce emissions by 30% is to reduce the whole production by 30%, but where we're able then to displace coal, which is less efficient from a CO2 perspective, with gas, which is more expensive, that really draws the economics, so at the moment, kind of given the current economics of LNG and alternative gas, 6.7 really is the affordability aspect to which we can, recover. I think given then kind of further enhancements to the business, optimization of costs, optimization of coal, quality of coal. Those are all parts of those initiatives that we are really pushing to recover value and will continuously reassess carrying value, and then update the market, on that basis.

So, if I may weigh in before Simon goes for the next part of the question, Chris, is that, what we've seen in this assumption is basically you can term it almost a worst case scenario having no proven things that we are busy working on, but that couldn't be brought into the calculation just, because of the, the stringent IFRS rules in terms of how to consider prospects versus proven prospects. And so, I can assure you that we're working on a whole host of issues to address that. And specifically, you know, the outcome to restore on the volume is going to be a key aspect that we are focusing on. And as we as we materialize some of those benefits, we'll definitely bring that back, but our plan is to address it meaningfully to improve value over the next years before we get to the 2030 timeframe. Simon?

Yes, Fleetwood. There was two questions to - two parts to Chris's question. The first one was, what is the volume of coal that Secunda operation will use post 2030? That number is, we've previously communicated. We're going down from 40 million tonnes on average to 30 million tonnes. So that's where we're going to be post 2030. And that 10 million tonne space is what Fleetwood is referring to - he say we'll have to look at, an alternative ways and sources to try and fill that gap. And the second question is on the on the 12A. You remember what we're asking for on the 12A is for the site to be regulated, I mean, on a log basis versus a concentration basis. So that that's what you're asking for. We hope, I mean, and believe that I mean represents, the best possible solution for us going forward. If, the Minister were to, upheld the decision of the NAQO, what we will do, we'll have to follow due process because I mean, there is a process to try and resolve the issue. So, we will continue with that, I mean, to try and find, dynamical solution to both parties.

And I might just add, Chris, that we we've got confidence that it is not a better solution only for Sasol. It's a better solution for the outcome of that pollutant in terms of the communities and areas that we operate in in Secunda. Because we've got, other precedents where the mass base, assessment on these emissions are practiced and is a very effective way of dealing with it. And so, we in that process, we believe we've got a very clear substantial benefit, and we will, present that as part of the process and suffice to say there are also other areas where we are, regulated on a low basis. For example, in the U.S. that is also a practice that's been accepted.

Thanks Fleetwood. I think it's very clearly explained on your website. I was just wondering in the worst-case scenario, whether we would have a negative impact on production volumes if you didn't get that relief from the minister.

Yes. I think it is about the license of the operations. So it is a dire outcome. If it's - the license is withdrawn, it will imply a phased shutdown of the facility, which we believe is not in the interest of everyone, given that we believe our solution is going to be a superior outcome that will not require to phase shutdown.

Thanks very much, Fleetwood.

Thank you for your questions, Chris. I'm going to move to Alex Comer, please, also on Chorus Call.

Alex Comer from JPMorgan. Please go ahead, sir.

Can you hear me?

Yes. Thank you. Alex, go ahead.

Yes. Look, another question on the write-down and following on from the excellent questions from Gerhard and Chris. Look, I don't want to labor the point here. But if you look at that fuels business, it is probably making, I don't know, ZAR 20 billion of free cash flow. So incredibly strong cash flows at the oil price and rand you've indicated in the next sort of five, six years and then a collapse. So you've given us this 6.7 million tonnes production number in 2030. So what happens to production over the next 20 years? Are you still expecting to hold that number or putting second, or does it drop dramatically? I just wondered if you'd changed that. Also, what is the oil price assumption. We know that it's $88 real to 2030? What is it after that? And then also, what is the carbon tax assumption that you've got embedded into these numbers? Thanks. Hanré Rossouw: Thanks, Alex. So effectively, just to start perhaps with the oil price, the ZAR 88 is an average of the - dollar, sorry, let's make it dollars. $88 a barrel is the average long-term nominal price. So it is - I think it's in line with a real price that is close to consensus. I think it's not a - certainly not an outlandish price. And I think that does bring sort of margin squeeze into that business. The key is - I think you're spot on that, we are generating strong cash flow now beyond 2030, given that we now then have a tale of negative cash flows over the period, for example, if I look at the 2030 to 2040, we've got about negative ZAR 13 billion discounted kind of value in that part and then a further negative cash flow, ZAR 40 million to ZAR 50 million. That brings the carrying value then to zero as we've discussed before. I think the last part in terms of -- and certainly, the other assumption, uncertainty is carbon tax. And again, there, we've used the current trajectory, $20 going to $30 per tonne of C02, the key uncertainty is then what does one do with the carbon tax allowances. So there, we've also just used an extension of what we know at the moment, but that remains a critical assumption also going forward, that will underpin the kind of that carrying value.

And then the last part, Hanré, is that up to 2030, the assumption is that there is a range between 7.1 million tonnes, 7.2 million tonnes thereabouts is the assumption. And therefore, the point that I made is that we're working on a whole host of issues. So if you restore the coal quality, we believe that would work against the impairment because then we would be able to generate cash where it matters most in the near six years or when we implemented destoning, say from FY '25 or calendar year '25 on, that will restore to more historic volumes. The ASU operations would also then contribute to offset some of the woes. Hanré Rossouw: And yes, just to confirm that 6.7 million tonnes is flat from 2030 to 2050. But I think, for example - and we are looking at various technologies to back that out. For example, if we can get a carbon capture and you can revert that volume's back to 7 million tonnes or more, kind of pushes out the - if it pushes out the need to reduce the 30% by capturing CO2. And we've got a really available streams of carbon that we can capture. Those are the kind of opportunities that we're working on then ultimately to offset that reversal. And it's not just 2030, but it's really that journey to net zero ambition in 2050 as well that we will continue to progress the various technology solutions.

Yes, Hanré, if I may add, yes, we've now introduced the 6.7 million tonnes number. The critical assumption underpinning the 6.7 million tonnes is also the grid emission effect of the South African grid. So we also see, I mean, an upside of up to 300 kilotons if grid emission effect has, I mean, improves. So I think holding the 6.7 million tonnes or they're up to 2050, there will be a critical assumption that we must take into account. So we see as the grid, I mean, does improve that you can access that.

Sorry, Hanré, I just wanted to - sorry, no, I just want to just confirm one thing. Because if I look at Note 8 in your account, it says the oil price assumption of $88 a barrel is for five years. Are you saying that, that real $88 price is the 2050? Or is there some other oil price post-2030 assumption? Hanré Rossouw: So that's the average long term. We can take it off-line, but the detail there.

We'll confirm for you, Alex, and get back to you on that assumption. Thanks for your questions. We are talking to you later today. So hope to get more of them there. I'm going to just finally wrap up on the impairment topic with two more questions, Hanré, which has come through, and then we can move over to more strategic questions. I think Adrian from SBG just wanted to confirm what is the potential upside? What is included in the impairment assessment in terms of feedstock and any upside potential from the PSA and coal brigading projects, et cetera. And I think another important question is from Shoaib at Aluwani Capital. If the Secunda fuel and chemical components are so integrated, why are they tested separately for impairment purposes? Hanré Rossouw: Thanks. I think perhaps just to start on the capital assumptions, Page 21, and this is where my eyesight - failing eyesight is the falling short, but there's a little footnote that details the exchange rate assumption for our capital guidance. So just to reiterate capital guidance for the year is ZAR 32 billion, ZAR 33 billion on a maintain and sustained basis, ZAR 1 billion on a growth basis. We've got about ZAR 10 billion of that is in U.S. dollar denominated, so that relates to our Mozambican investment. And of course, also our international chemicals business, and that's set at just over ZAR 16 to the dollar. So given, of course, the current weakness in the rand, there is some risk to that. But we'll continue to manage risk both from an exchange rate inflation to really push for capital efficiency in the delivery of that.

The other question on the integrated nature of fuels and chemicals on impairment assessment? Hanré Rossouw: So again, that's the risk now of getting caught in the vagaries of IFRS. So yes, it is - I think it's always a debate how to define a cash-generating unit given our integrated value chain, and we will continue to reassess that. I think the fact that we take the smaller, more granular approach gives us more clarity in terms of where there is headroom and deficits in the carrying value relative to the value and use. And I think our disclosure to that extent is also extensive enough that the reader can then aggregate or disaggregate the numbers. But it is a valid point. I think the point we made previously, to the extent that we then show significant value still in the chemical value chain does give a good insight into the way that we manage the business. and the strategic options available to us going forward. If we just aggregated that, it will be much less difficult to understand those strategic options.

And I may add that in terms of the way that you define the boundary limits on the cash-generating unit, is that you have to have a definable market. So if your unit is linked to basically known fuel and slate markers, then it becomes quite easy to define that, but you can't now patch in there something like a comonomer market, which is totally driven by other dynamics in market demand and supply. And therefore, that also informs how we define the cash-generating units in Secunda.

Thank you, Fleetwood. I'm going to shift gear a little bit to sustainability. There are -- there's a question from Desmond Medupe from Ashburton on how is Sasol tracking against the just transition plan. We have already covered the air quality question, Desmond, which was your second question. And then I think another question from Herbert Kharivhe on the progress of our green hydrogen projects and SAF suite of projects.

Thank you. Thank you, Tiffany. So I'm going to deal with the first one and ask that Priscillah weighs in on the hydrogen and SAF projects. I will touch on the joint venture that also covers on SAF. So Desmond, in terms of the just transition, we have made quite progress over the last year. We have defined our just transition strategy, which we had supported by the Board. We've started our just transition office, we started to collaborate and engage with many stakeholders from the region, Mpumalanga to other stakeholders in business in terms of the just transition pathway that we want to follow. We've identified a number of areas where we have to prepare to address the just transition. So I think early stages, strategy in place, we're starting to execute on that. We've got the offers going. So I think there are progress steps that we can bank. So with respect to the SAF projects, Priscillah will weigh in on the South African landscape. But in the international landscape, as we get the merger control approval on the joint venture with Topsoe, we believe there are exciting prospects that we are working on ranging from projects in Europe to projects in the U.S. And of course, the whole objective is to look at it on a joint venture basis, and the partners are quite keen to start maturing some of those. Of course, it is informed by the feedstock location and the offtakes but we are making progress there. And once we got operational steps in forming the joint venture, we then can really take off by joining our forces.

Thanks, Fleetwood. From a South African perspective, to start building on Fleetwood, on the SAF, with now our joint venture has been shortlisted for submission of the bid to the HG Global in terms of off-tax. And we are preparing for that. It's expected to be by end of this financial - calendar year 2024. We continue to be concerned, however, in terms of the EU regulations. So we have a team that's working better closely with both HG Global as well as [indiscernible] to ensure that we are progressing these two projects in line with those regulations as well. So those developments are ongoing, but we're encouraged by the positive shortlisting of the project. In terms of the first hydrogen project in Sasol bank, which is quite key for us because it's our catalytic project. We're making good traction in the second quarter of this year, we will be launching the hydrogen mobility with partners. And we hopefully, as we start to progress with the finalization of that, we'll start to bring in more a broader consortium that can actually start to demonstrate and ensure that we've got a sustainable case study for the green hydrogen projects going forward. On the megaprojects, we've progressed the one that we really focused on. We finalized the master plan for the jointly with Northern Cape that has been handed over. We are now in terms of the next stage gates for the prefeasibility study. The key element of that was really the port development. So we're watching that with interest. You've seen the recent developments. So we will engage with all partners to understand what the next steps look like and make a decision afterwards.

Thank you. Thank you, Priscillah. I am going to take one last question on Chorus Call, and that's from Adrian Hammond. Adrian?

Morning. Thanks very much. Yes, I have two quick ones. Just to clarify further on the impairment and what it means for the future and how realistic this impairment really is because it seems quite self-punitive to me because of this premise of the climate change policy of your own. So just to be clear, does - what is the potential increase in recoveries from coal precutting? And is that factored into value calculation and as well as the PSAs expecting an update on the recoverable reserves from the PSA. So what's happened with that? And then secondly, for Priscillah, there's been some news flow from Connecticut regarding some recent discoveries of corporate methane. Is that an opportunity for Sasol? Thanks.

Thank you, Adrian. So we will deal with it in two parts. The coal brigading, in terms of the recovery on feedstock base, Simon will deal with; and then PSA as well as the other question will be dealt with by Priscillah.

I'll start first, perhaps. Adrian, thank you. In terms of the assumptions for the impairment, we've assumed the extension of the plateau to FY '28 as we've previously indicated. In terms of assumptions for all of our projects, PSA, [P50] as well as the current extensions that we are doing, we are assuming a P50 and that's what has been built into the assumptions up to FY 2028. As Fleetwood has indicated earlier on, we are continuing with our exploration as well with our continued development around gas. And all of those opportunities, which we call contingent resources, which we believe will be able to take us beyond the 2030 are not yet built into the assumption. So we go through a very rigorous process before we actually extend the plateau and build assumptions in. So just to indicate the actual petajoules, we've assumed 70 petajoule for Secunda going forward, which is currently in line with our current reforming capacity that we have. So that's for Secunda and gas, specifically on PSA, we've actually made good progress in terms of the well that we've drilled. It's now connected, as I've mentioned in the previous discussion during the half year. And in addition to that, we've now finalized the 3D seismic, and we've been doing a lot of detailed modeling to be able to understand the resources much better, and that is now in the process of being finalized. And our intention is that by the end of August into mid-September, we'll be submitting a field development plan to the Mozambican government and that will go with the commercial increment of offtake for the guests that will come to South Africa. While we're seeing some normal variation within the P50, we encourage that it is actually - these are indicative numbers…

Okay. Thanks.

Thank you, Adrian. We'll talk to you also a little bit more extensively later today. I'm going to wrap up with one final question.

No, no. Thank you, Adrian. The coal brigading has already been factored in post the 2030. I mean all that it does is that it's a carbon source. So if you didn't have brigading, you'll have to mine more. So we've already factored that in. My assessment is post-2030, we got space in gasification, we got space in the boiler plant, we got space in the refining plant and the management team is going to work very hard, like Fleetwood has said, to see if we can fill up that space and recover the volumes.

Okay. Final question for Fleetwood from [indiscernible]. Any update on succession planning?

Yes. Thank you, Sia. So we have reported earlier this year that succession is a key focus area for the Board. The Board is still on track to go through the process to finalize that. And as indicated last - in the last time that we talked around this subject, it is going to be announced early in the new year, if not even at the end of this year. So there's a slight push for that outcome as well. So I know that this will come to a fruition. And the Board is fully committed to make that decision by early next year or earlier.

Thank you very much, Fleetwood. I'm going to close the session for today. Thank you very much to the Sasol management team for their participation and to all participants online and on Chorus Call. We look forward to further engagement with you over the next few weeks. With that, I'll close the call. Thank you.