Sasol has today updated its guidance for LCCP following a review process 
to assess the project costs and schedule.

    - LCCP's schedule remains on track with the Ethylene Glycol/Ethylene Oxide 
Unit due to achieve beneficial operation within days. The only revision to the 
schedule is the Guerbet Unit which will now be on stream in February 2020. As 
at the end of March 2019 project completion was at 96% with construction 
completion at 89%.
 
    - Sasol remains confident that the longer term EBITDA outlook for the LCCP 
remains robust. 

    - The forecast total capital cost for the project has increased to $12,6 - 
12,9 billion, including a $300 million contingency. The drivers of the changes 
in capital costs are understood and a series of mitigating actions are being 
taken to ensure delivery within the revised parameters. 

    - Sasol's balance sheet is sufficiently robust and management actions are 
focused on deleveraging the balance sheet, simplifying the asset portfolio and 
executing our value based strategy. 

    BACKGROUND

    In the Company's trading statement, released by the Stock Exchange News 
Service on 8 February 2019, updated guidance was provided for LCCP's schedule 
and capital costs, which were estimated in the range of $11,6 - $11,8 billion. 
Following this announcement a number of changes were made to the management of 
LCCP, with project accountability immediately reassigned to the Executive Vice 
President of Chemicals, Fleetwood Grobler and the strengthening of our project 
controls organisation.

    This team became concerned regarding the accuracy of the project's cost 
forecast and, as a consequence, our third quarter Business Performance Metrics 
announcement in April 2019 indicated that the LCCP's cost was tracking the 
upper end of the range. Management also initiated a full review of the costs 
and schedule until project completion with input from independent technical and 
financial advisers.

    This review identified significant additional concerns related to the LCCP 
forecasting process and a marked increase in the projected total cost. The 
review also confirmed that the actual project expenditure as at 31 December 
2018 amounting to $10,9 billion was accurate and complete. Weaknesses in the 
project's integrated controls were identified and are being remediated.

    The Board has also commissioned a review to be conducted by independent 
external experts.  This review will cover the circumstances that may have 
delayed the prompt identification and reporting of the above-mentioned matters. 
Upon conclusion of the review the Board will take appropriate action to address 
the findings.

    UPDATE ON KEY PROJECT PARAMETERS

    The first derivative unit, Linear Low Density Polyethylene (LLDPE), 
achieved beneficial operation on 13 February 2019 and the plant continues to 
ramp up in line with expectations.  We have achieved beneficial operation of 
the Ethylene Glycol unit (EG), with beneficial operation of the Ethylene Oxide 
unit (EO) expected in the coming days. The Ethane Cracker is still expected to 
achieve beneficial operation in July 2019.  The remainder of the LCCP schedule 
for beneficial operation is as previously indicated in February 2019 apart from 
the beneficial operation of the last derivative plant (Guerbet unit), which is 
expected to be one month later in February 2020.  As of the end of March 2019, 
overall project completion was at 96%, with construction completion at 89% and 
capital expenditure on the project amounted to $11,4 billion.

    Following the review noted above, the cost estimate for LCCP has been 
revised to a range of $12,6 - $12,9 billion which includes a contingency of 
$300 million. The principal factors that impacted the revised cost estimate to 
complete LCCP are adjustments to the February 2019 cost forecast of 
approximately $530 million and additional events and remaining work impacting 
February 2019 cost forecast - approximately $470 million. A contingency of $300 
million has also been included.

    ACTIONS TAKEN TO DATE

    This increase in the anticipated LCCP capital costs is extremely 
disappointing. Executive management has implemented several changes since 
February 2019 to further strengthen the oversight, leadership for the project 
and frequency of reporting.  Actions include segregation of duties between 
project controls and finance functions and assigning a Senior Vice President to 
have responsibility for the LCCP project controls.  Initiatives to improve 
decision making, transparency and documentation within the project management 
team are also in progress. The new project leadership has been instrumental in 
identifying and remediating these issues.

    The reviews and investigations initiated by management to date indicate 
that the underlying control weaknesses are limited to LCCP.

    FINANCIAL IMPACT

    The increase in the LCCP's cost does not alter Sasol's capital allocation 
strategy. The plan remains to reduce balance sheet gearing towards 30% followed 
by an increase in the dividend pay-out ratio to 40% and remains on track to 
occur between financial years 2020 to 2023.  Over this period the anticipated 
contribution from the LCCP has been negatively impacted by a change in the 
short and medium term pricing outlook. Operating costs for the LCCP, although 
projected to be slightly elevated during start-up, are otherwise still in line 
with previous guidance. As a result the earnings before interest, tax, 
depreciation and amortisation (EBITDA) for financial year 2022 of $1,3 billion 
have been revised to approximately $1 billion.  The long term market pricing 
outlook is still in support of a long term run rate EBITDA contribution from 
the LCCP of $1,3 billion.  The short term market outlook for ethane and product 
pricing remains volatile and estimates will be updated periodically.

    As previously communicated to the market, management has substantially 
completed the detailed asset review programme. This process forms a key part of 
the portfolio optimisation strategy, and has now progressed to the stage where 
the disposal of larger non-core assets can be accelerated. The Company will 
target the disposal of assets which have an aggregate net asset value exceeding 
$2 billion. The safeguarding value will be prioritised through this process, 
and the financial metrics disclosed above do not rely on any asset disposals. 
Relevant disposals will therefore further support the deleveraging of the 
balance sheet, as well as simplification of the investment portfolio and 
increased focus in executing our value based strategy.

    Disclaimer - Forward-looking statements

    Sasol may, in this document, make certain statements that are not 
historical facts and relate to analyses and other information which are based 
on forecasts of future results and estimates of amounts not yet determinable. 
These statements may also relate to our future prospects, developments and 
business strategies. Examples of such forward-looking statements include, but 
are not limited to, cost estimates and expected timing of beneficial operation 
of LCCP, targets or guidance regarding our gearing ratio and dividend pay-out 
ratio, net debt-to-EBITDA ratio, EBITDA and internal rate of return for LCCP, 
as well as statements regarding our future liquidity, credit ratings and 
non-core asset disposal strategy. Words such as "believe", "anticipate", 
"expect", "intend", "seek", "will", "plan", "could", "may", "endeavour", 
"target", "forecast" and "project" and similar expressions are intended to 
identify such forward-looking statements, but are not the exclusive means of 
identifying such statements. By their very nature, forward-looking statements 
involve inherent risks and uncertainties, both general and specific, and there 
are risks that the predictions, forecasts, projections and other 
forward-looking statements will not be achieved. If one or more of these risks 
materialise, or should underlying assumptions prove incorrect, our actual 
results may differ materially from those anticipated. You should understand 
that a number of important factors could cause actual results to differ 
materially from the plans, objectives, expectations, estimates and intentions 
expressed in such forward-looking statements. These factors are discussed more 
fully in our most recent annual report on Form 20-F filed on 28 August 2018 and 
in other filings with the United States Securities and Exchange Commission. The 
list of factors discussed therein is not exhaustive; when relying on 
forward-looking statements to make investment decisions, you should carefully 
consider both these factors and other uncertainties and events. Forward-looking 
statements apply only as of the date on which they are made, and we do not 
undertake any obligation to update or revise any of them, whether as a result 
of new information, future events or otherwise.

    About Sasol:

    Sasol is a global integrated chemicals and energy company. Through our 
talented people,  we safely and sustainably create superior value for our 
customers, shareholders and other stakeholders. We integrated sophisticated 
technologies in world-scale operating facilities to produce and commercialise 
commodity and specialised chemicals, gaseous and liquid fuels,  and 
lower-carbon electricity.


    Source: Sasol Limited