And therefore, hopefully your question is answered. Riaan, anything to add to that.
Riaan Rademan: 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.
Fleetwood Grobler: Thank you.
Tiffany Sydow: 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?
Fleetwood Grobler: 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.
Priscillah Mabelane: 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].
Fleetwood Grobler: Thank you. Simon.
Simon Baloyi: 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.
Tiffany Sydow: 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.
Tiffany Sydow: Thank you, Hanré. Priscillah – the question, apologies again could you just address on the crude premiums.
Priscillah Mabelane: 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.
Tiffany Sydow: 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.
Operator: Of course. Gerhard, you can go ahead, sir.
Tiffany Sydow: Gerhard, can you, bring through your questions?
Gerhard Engelbrecht: Sorry, yes. Can hear me?
Tiffany Sydow: Yes. We can hear you clearly. Go ahead. Gerhard, we’re unable to hear you. Do you want to try again?
Gerhard Engelbrecht: Is that is that better? Can you hear me now?
Tiffany Sydow: Yes. Please go ahead.
Gerhard Engelbrecht: 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.
