Good morning and good afternoon, ladies and gentlemen, and welcome to the Sasol annual financial results conference call. Today's call will be hosted by David Constable, President and Chief Executive Officer, and Bongani Nqwababa, Chief Financial Officer. Following the formal presentation by Sasol management, and interactive Q&A session will take place. A copy of today's slide presentation is available at www.sasol.com. I would now like to hand the conference over to Mr. David Constable. Please go ahead, sir.

Thank you, operator, and good day, everyone. Thanks for joining us for Sasol's year-end results conference call. Joining me on this call from Sasol, as you heard, is our CFO, Bongani Nqwababa. We also have with us other members of our Group Executive Committee in both Johannesburg and Houston who will support us in responding to any questions you may have. As you would have seen after yesterday's media presentation, we announced another resilient Group-wide performance, notwithstanding the steep decline in crude oil prices for the period under review. Our 2015 financial results are a testament to the ongoing commitment of our people and the decisions we took to strategically reposition Sasol for the future and the agility with which we responded to a fundamentally different energy landscape. Turning to slide 4 and the key messages you'll hear today, I'll begin by reminding you of how the decisions we have taken as a management team are providing Sasol with a solid platform during these challenging times in our industry. Next, we'll provide you with an update on two of our most important initiatives, our business performance enhancement program, which continues to deliver a meaningful Company-wide contribution and our response plan, which was launched to respond to the lower for longer oil price reality. We'll then go into more detail on our strong operational and financial performance in FY 2015, with Bongani providing a complete overview of our full-year results. And before wrapping up, I'll take you through certain refinements to our strategic agenda, including the advancements we've been making on our dual regional strategy and the momentum we are maintaining on selective growth projects in southern Africa and the US. And to conclude the call, we'll recap how Sasol is protecting shareholder value by proactively prioritizing our business activities. Turning…

Thank you, David, and good day, ladies and gentlemen. It is my pleasure to present our 2015 year-end result to you today, which have exceeded analyst consensus and are well within the earnings range provided in our recent trading statement. We have delivered another strong operational and cost performance, despite a highly volatile and uncertain macroeconomic environment. We will continue to deliver sustainable value to our shareholders and ultimately our stakeholders. Please [now move] to slide 10. During the period under review, global economic growth continued at a moderate and uneven pace, with oil markets in oversupply resulting in significantly lower oil prices. The expected increase in the US interest rate, coupled with uncertainty over the South African growth rate, placed the rand-dollar exchange rate under continued pressure. The average rand-US dollar exchange rate was 10% weaker, with a 33% lower average Brent crude oil price. Chemical prices and margins have on the other hand been much more resilient during the period under review. The basket price of chemicals in both our base and performance chemicals businesses experienced only a 13% decline in dollar-based sales prices. The Sasol business still remains highly sensitive to significant movements in the rand-US dollar exchange rate and oil prices. Turning on to slide 11, overall, we delivered a strong Group-wide operational performance as a result of increased sales volumes and significant cost savings contributions across the value chain. This was coupled with improved margins in our chemicals businesses. Profit from operations of R46.5 billion was up 2% and benefited positively from one-off items of R14.7 billion. This was driven largely by macroeconomic factors, changes to the share price and increasing the useful life of our Secunda and Sasolburg operations to 2050 and 2034, respectively, by securing feedstock. Headline earnings per share decreased by 17%…

Thank you, Bongani. To retain our flexibility, we've recently refocused our efforts and refined our strategic agenda for the next five-year period. [So we'll ensure] that strategy remains both relevant and achievable in the current and forecast macroeconomic environment. Now looking at slide 23. And as you can see from the left hand side of the diagram, our strategic agenda is now aligned with our new operating model, identifying in no uncertain terms what each operating entity should be driving up to 2020. In response to a lower oil-price environment, we're focusing on enhancing our existing assets and on driving selective growth opportunities to create value. To achieve this, here are some of the noteworthy refinements to consider. First, we are looking at selective gas and liquids opportunities and in tandem we are considering from a commercial sense various technology licensing models. Second, although not a change, we are emphasizing the promise that gas to power has as an important option in Southern Africa. With our electricity challenges, this can only serve to bolster much-needed power supply. Third, we continue to drive our growth programs, primarily in Southern Africa and the US, although our focus has shifted somewhat from energy to chemicals in the near term. Of course, our business performance enhancement program and the response plan are both key enablers allowing us to deliver on our strategic aspirations. Putting these refinements aside, our strategic agenda reinforces the importance of a diversified portfolio which ensures resilience. As we look beyond the end of the decade, we are also fine tuning our longer-term strategy where in the future Sasol primarily remains an integrated natural resource monetizer and a technology leader. Moving onto slide 24. Over the past year, we continued to strategically position ourselves to advance our gas-based growth programs, concentrated…

[Operator Instructions]. We'll go first today to Jarrett Geldenhuys with Investec.

Hello everyone. Thanks very much for the opportunity and first of all congratulations on what I also interpret to be a very good set of results. Just in terms of some of the cost saving which I suppose we can still extract further. I'm quite interested in the mining costs which were very well contained. I just wonder if you can give us a bit more color as you move into the newer mines, how much more potential savings there could be just given the fact that they will be newer and closer to -- well, I suppose closer to operation to some extent? And then also just another question quickly on gearing. I know you've given us some nice guidance between 15% and 30% for next year. Can you potentially just give us some kind of color on what your FX assumptions are in that arranged broad band and where you'd see that peaking giving the peak part of the CapEx for the US? Thanks very much.

Thanks Jarrett and thank you for the recognition on the results, it's appreciated. Mining costs, I'll turn it to [indiscernible] and Bongani. Do you want to take on mining costs, we've got new mines coming on, much more productive [indiscernible] already this year and Shondoni next year. Just give us a little color on where we think mining costs are going.

Yes, Bongani here. If I might respond to that. Our anticipation is that in spite of the [late buy] increases, we see the costs being slightly below South African inflation.

Okay, thank you. Gearing, guidance of 15% to 30%, Jarrett, like you said, in FY16. We see a peak gearing rates 38% to 39% is what we're looking at right now. On FX, can we give them some color on the assumptions? Rand of between 12.50 and 13.50 is what we're looking at in the assumptions on that. Thanks Jarrett.

We'll take our next question from Sean Ungerer with Avior Capital Markets.

Good afternoon everyone, just three questions please. Just in terms of the expected CapEx for the cracker, I know it's still fairly early days but do you still see any opportunity to bring that down? And then just secondly with the spread obviously hovering at 50, below 50 at the moment, when does the dividend cover that was revised this year become a problem for you guys? Or when do you think it will at least? And then just lastly, in terms of the volumes out of [Synfuels] it's really good, solid production there. I think it was about 32.9. How much upside do you guys foresee or was that a new sustainable number? Thanks.

Okay, let me just see if I've got these right. The first one was on cracker capital costs and if there's any, if you will, upside on that.

Yes.

This question was on Synfuels production, is there any upside there going forward. Could you just -- did someone get the second question? It was garbled?

Yes, sorry David.

Thank you, breakeven levels at operations. So we do have Steve Cornell on the line from Houston, CapEx [indiscernible] right now on the cracker is still tracking to $8.9 billion, still have a good level of contingency being held by ourselves. So we've had good results with obviously the downturn in the industry -- in the oil and gas industry and the lower oil price, we've been able to go back and negotiate, if you will, with all our contractors on fees and on some of the contracting rates as well. So that has helped us. But right now we're still tracking at $8.9 billion. I think, like you said, it's a little early to start trending away from that number. But as I said in the prepared notes, they're making good progress on the project and with a focus on utilities and [off sites] right now getting the engineering and procurement on the utilities and off sites to get up to speed with our process units which are all on track, basically, progress wise. So yes, Steve, do you have anything to add or is that sufficient?

No, I think that's sufficient. We've made good progress where we can, have some opportunities, you always have some unexpected increases on the other side. We're very comfortable with the $8.9 billion and look like we're going to continue to track on that level.

Thank you. Breakeven costs, I'd be guessing, I think I know there but go ahead, Bongani.

The breakeven cost is -- would sit just below $40 per barrel.

Cool, great.

Then on Synfuels, we had a great year. 32.9 million barrels and that equates to, in the old way of talking about it, about 7.7 million tons for FY15, 3.9 million tons of liquid fuels and 3.8 million tons of chemicals. As you heard, we're talking about over 60 million barrels from a liquid fuels sales volume perspective and guiding at Synfuels right now about 31.7 million barrels. So down slightly from this financial year but possibly some upside to that. But those are the numbers as we see them right now. Thanks, Sean.

We'll take our next question from Alex Comer with JPMorgan.

Hi guys. A couple of questions here. I notice from your remuneration report that there were some specific targets for Phoenix in for 2015. I just wondered if you could let us know what the threshold and the stretch targets are for cost savings for 2016? That's the first question. Also just on chemical prices, they've been pretty firm in the second quarter and are starting to come off now. I just wondered what your expectations are for chemical prices, particularly [indiscernible] in the next couple of months? And also, what your exposure is to contract and spot ethylene prices in the US? Then maybe you could give a little bit more information on the costs and timing of your Mozambique explorations?

Thanks, Alex. Remuneration I think we've got that for the threshold and stretch for FY16. Go ahead Paul. Paul Victor is joining us.

Good afternoon everybody. Yes, so basically from a stretch target perspective, what we have done for our cost targets was incorporate our project Phoenix as well as our response plan. So with our Phoenix, we've mentioned before, we plan to achieve R4 billion of cash cost savings in financial year 2016. And then we provided guidance between R4 billion and R7 billion on the cost savings for the response plan. And all of this has been built into our targets. If we achieve effectively the response plan and project Phoenix cost objectives, then effectively that becomes the 100% target. You have to outperform that for a stretch target. And it's -- and in a very narrow band below that, if you miss the target then effectively you will go through the zero scoring range. So it's very narrow on the down side but a long stretch on the up side. But effectively, 100% for all your response plan and Phoenix targets being met.

Thanks, Paul. Now on chemical prices, as you heard, in FY16 base chemicals margins will come under some amount of pressure and performance chemicals -- on the performance chemicals side, those margins will be varied depending on which product we're talking about. So maybe I could ask Fleetwood to give a little more color around [surfactant] and [ethylene] prices that Alex is looking for.

Thank you. Alex, yes, the view on surfactants pricing going forward is that we had a very stable year and as a matter of fact, we've been able to grow some volumes, sales volumes in that specific area. Our expectation's that it's going to remain robust in this coming year. Looking then into the question regarding spot ethylene price, yes it has come under pressure lately. You also need to take into consideration that we are taking that benefit also downstream into the derivatives. So that margin flows through in our downstream products in that sense. But we believe that will also recover. And as we start to minimize our exposure to the spot ethylene price, remember that by the end of next year with Gemini we would consume most of our spot ethylene that we currently sell into the market, so that would mitigate that exposure. As well as we ramp up our [indiscernible] project, we may find ourselves towards the end of next year, early year thereafter that we would be almost a net buyer of ethylene before the big LCCP cracker starts up. So I think yes, it will soften but I think we still have a solid outlook to most of the other product groupings. The part that is really under pressure, we know that, is the base chemicals which is mostly affected by the lower oil price [indiscernible] play into the ethylene derivatives and propylene derivatives and we also foresee some interesting new capacity coming into play as of next year in the Middle East and that would also put further pressure on our polymer prices. So that's more or less the view.

Thanks, Fleetwood, thanks Alex for the questions. I think we'll move on now, operator.

We’ll take our next question from Gerhard Engelbrecht with Macquarie.

I'm sorry, operator, let me just talk to Mozambique for one second. I turned my page there. timing and costs for Mozambique, the PSA development, the field development plan for tranche 1 of the PSA development as I said, was submitted in February. We're awaiting field development plan approval. We think in the October timeframe. Certainly before the end of the year and possible as early as October. The ultimate program is just over $2 billion that we'll be investing in tranche 1 of the PSA development. The gas [indiscernible] reserves obviously we've got to pipe some wells before we can make the call on the ultimate reserves there. But the first port of call is to produce 400 megawatts of power in Mozambique and we're looking at a study to take that gas into power generation in Mozambique, that would be the first project that would be assigned to that gas as it becomes available. And we've also obviously got the oil reservoirs and LPG which is very interesting for us as well. So timing wise, Riaan, do you have timing as far as start up?

Completed, pending -- good afternoon, it's [Riaan Rademan] -- depending on the FDP, field development plan approval, the expected completion is by 2019.

Good, thank you. Okay, operator, now we can proceed.

And [indiscernible] Gerhard Engelbrecht with Macquarie.

Good afternoon, thank you. I have a couple of questions as well. David, you said at the outset [indiscernible] water price to fall at some point. What --

Sorry, operator, could you turn up the volume of Gerhard, please?

Please go ahead, again, sir.

Okay. Can you hear me now?

That's better, thank you.

Okay, you said at the outset of the presentation you expected the oil price would drop. What is the time [technical difficulty] selling oils at this point? That's my first question. Just looking at [technical difficulty] benefits from EPU5 C3 stabilization yet? [When] do you expect the full benefits to come through? And then lastly, what is the end game for you? You keep on spending, more gas is being produced in the [technical difficulty] and moving west in North America. It's not quite clear what the [technical difficulty] what for you is the end game?

I think you asked about oil price to start with and where they're going? [Multiple speakers]. Can we at least try that one? Can you talk to EPU5, it's up and running at 47,000 tons. I'm not sure if we're quite at full capacity, almost. But Bernard Klingenberg here will talk to the EPU5 C3 stabilization status, if you will. We didn't get your first question but Bernard can you take the chemicals questions?

Thanks, David. So the EPU5 is running, is running well. We haven't seen a full year of benefit yet. So in the coming year, we'll probably see more benefit from EPU5. But I'd guess the true value chain's running well. There has been some benefit from C3 stabilization already but again, not a full year. There's other knock-on effects apart for the value chain that we're working on. So we'll see significant benefits in the financial year 2016. Both of those projects. More benefit than we've seen in the last year.

Did you [touch on] the C3 expansion? I don't think you did [multiple speakers].

But also on C3 expansion, propylene -- basically propylene expansion, polypropylene expansion, that's another 105,000 tons in FY16 that we'll talk to everyone about on the roadshow as well, Gerhard, so that's another thing to consider. Again, we didn't get the first question but the last question I think was on shale gas in Canada and the path forward. We're still obviously very excited about that play and de-risking it to figure out how much liquids we have in the Cyprus side; we've got very few rigs on. Can we have a little more color on the study that we're doing?

So we've committed to our Board to come with a strategy in the first quarter of calendar 2016. And we believe there is still upside value, obviously the current gas prices and the carry that we still have puts us under pressure there. But the operation we have [indiscernible] energy, we've seen productivity improvements and also cost coming down. So yes, we're cautiously still optimistic of fully utilizing the [site].

Thank you. Gerhard, we'll get back to our first question when we see you tomorrow, sorry about that. Operator, we've got time for another question.

We’ll take Nishal Ramloutan with UBS.

Hi, yes, good day guys. Just two things from my side. The one is just a good performance on cost and, as you say, you've beaten the R1.5 billion target you had this year by about R1 billion. Just on next year's target, why is it still being intended R4.3 billion? is it just the case that you've actually realized cost savings ahead of time or have you actually realized cost savings, or have seen more cost saving than you expected? So maybe just on your guidance for next year, why is that still remaining flat? Then the other one is just in terms of -- again, good performance on your working capital. I'd assume a big portion of that was from revaluing your inventory at lower prices. Can you maybe give us an indication of what you've been doing there and how much of that was actually revaluing the inventory?

Okay, thanks Nishal. Let me address the first question on the business performance enhancement program target and let me say, we're going to get R4 billion in savings -- up to R4 billion annual savings this financial year with an exit rate of the R4.3 billion. We're comfortable with that number right now and I think I would just draw your attention to the fact that we're saying at least R4.3 billion. I think that's about as much guidance as we want to give right now. As we get closer, we'll continue to update you but best guidance right now is at least R4.3 billion and potential upside, I guess I'll just leave it like that. Okay, so on working capital and inventory, what are we doing there to drive that performance?

Well if I might respond to that. You would assume that the cash generated from operations was pretty strong, it only came down by 5.7% but it was helped by the working capital as you correctly pointed out. The breakdown of [indiscernible] R2.5 billion benefit on the capital credit [indiscernible] R1 billion on the response plan initiative and finally R2 billion on price.

Great, thanks Bongani and thanks Nishal for the questions. Thanks for calling in today, Bongani and I are looking forward to visiting with many of you in the coming weeks on our year-end roadshow trek. And until then, please stay safe. Thanks very much, thanks operator.

Ladies and gentleman, thank you for your participation, this does conclude today's conference.