Sasol Limited (SSL): PESTLE Analysis [Nov-2025 Updated]

You need to know if Sasol Limited (SSL) is a risk or a defintely solid opportunity in 2025, and the answer lies in its exposure to two massive forces: the global energy transition and South African political stability. The company's immediate margins are tied to global crude oil price volatility and the rand-dollar exchange rate, but the long-term story is all about the 30% reduction in greenhouse gas emissions target by 2030 and its pivot to green hydrogen and Power-to-X technologies. Navigating regulatory uncertainty around carbon pricing while funding the massive capital expenditure for the aging Secunda Synfuels complex is the core challenge. Let's map out the Political, Economic, and Environmental pressure points so you can make an informed decision.

Sasol Limited (SSL) - PESTLE Analysis: Political factors

South Africa's policy stability remains a key risk for long-term investments.

You're looking at Sasol Limited's long-term viability, and honestly, South Africa's policy environment is the biggest wildcard. The core issue isn't a lack of policy-it's the volatility of execution, which directly translates to a higher country risk premium for investors.

For the 2025 fiscal year, this risk was concrete. Sasol's Annual Financial Statements for the year ended June 30, 2025, show that an increase in the weighted average cost of capital (WACC) due to an independently calculated higher country risk premium contributed to a significant remeasurement loss. Specifically, this factor drove the impairment of the Production Sharing Agreement (PSA) and PT5-C assets, which accounted for R4.3 billion of the total R4.8 billion remeasurement items for the period. That's real money lost to perceived risk. Still, the government's late-stage concession on carbon tax (in the March 2025 Budget Review) shows the state can be responsive to industry pressure, even if it creates policy whiplash.

Government support for gas-to-liquids (GTL) and synfuels is vital but shifting.

The government's support for Sasol's energy transition is moving away from its coal-based synfuels legacy toward cleaner feedstocks and products. This is a crucial pivot. The state is actively supporting the development of Sustainable Aviation Fuel (SAF) at the Secunda Operations, which is a low-carbon derivative of the synfuels process, in partnership with the European Union (EU). This 'Clean Trade and Investment Partnership' is a clear political signal to enable Sasol to export sustainable fuel to the EU market.

Meanwhile, the company's revised strategy, announced in February 2025, reaffirms its reliance on Mozambican natural gas, extending imports until 2034 to ensure the continued operation of the Secunda complex. This move, while pragmatic for operational continuity, highlights the government's implicit support for gas as a transition fuel, even as a looming 'gas cliff' from 2028 is a known supply security risk for South African industrial clients.

Regulatory uncertainty around carbon pricing and emissions reduction mandates.

The regulatory landscape for carbon emissions has been a political battleground, but a key decision in the March 2025 Budget Review provided Sasol with a massive, near-term reprieve. The National Treasury decided to retain the basic tax-free allowance at 60% until at least 2030. This is a significant concession that stabilizes the near-term financial outlook, as it deviates from the previously planned annual reductions starting in 2026.

Here's the quick math: Sasol's earlier modeling suggested an annual carbon tax liability of around R20 billion if the carbon price hit $30 per ton and allowances were rapidly phased out by 2030. By retaining the 60% allowance, the government has defintely given Sasol the breathing room to fund its own transition. This policy decision directly supports Sasol's commitment to reduce its global greenhouse gas emissions by 30% by 2030 and achieve a net-zero ambition by 2050.

The table below summarizes the key policy shifts impacting Sasol's carbon tax liability:

Geopolitical tensions affect global oil and gas prices, impacting Sasol's revenue.

Sasol is a global commodity player, so geopolitical instability is an ever-present risk that hits the top line. In its April 2025 update, Sasol warned that profit margins were being squeezed by prevailing global macroeconomic pressures and geopolitical uncertainties.

The most direct impact is on the price of Brent crude, which is a major driver of Sasol's revenue. Geopolitical tensions in the Middle East caused the Brent crude oil price to spike from $69/b to $79/b in a single week in June 2025, demonstrating extreme volatility. For the full 2025 fiscal year, Sasol's Fuels EBIT decreased by a significant 72% to R5.2 billion (down from R18.9 billion in the prior year), a drop partly attributed to lower average Brent crude oil prices and reduced refining margins, despite the short-term spikes. The company's proactive hedging program is its defense against this volatility, but it can only mitigate so much. Global conflict makes your revenue highly unpredictable.

• Monitor the South African government's final legislative steps on the 60% carbon tax allowance.
• Track the progress of the EU-South Africa SAF partnership for new export opportunities.
• Finance: Draft a new 13-week cash view using a Brent crude price sensitivity range of $65/b to $85/b.

Sasol Limited (SSL) - PESTLE Analysis: Economic factors

Global crude oil and natural gas price volatility directly impacts profit margins.

The core of Sasol Limited's profitability is tied directly to global commodity prices, so volatility here is a constant headwind, or tailwind. For the 2025 fiscal year (FY2025), the company's performance was significantly impacted by a 15% decline in the average Rand oil price per barrel, coupled with a substantial drop in refining margins. This is a huge swing factor.

Despite this, the increase in average chemicals prices and strict cost controls helped cushion the blow, leading to a net income of R6.8 billion ($389 million) for the year, a strong recovery from the prior year's loss. Still, the underlying sensitivity is massive. A mere $1/barrel change in the average annual fuel price differential for the Sasol group is estimated to impact Earnings Before Interest and Tax (EBIT) by approximately R584 million ($38 million) in FY2025.

This is why you have to watch the Brent crude forecast. Analysts projected the Brent crude oil price would fluctuate widely between $60/barrel and $95/barrel for the balance of the 2025 fiscal year, which maps directly to the uncertainty in future profit margins.

The rand-dollar exchange rate significantly influences export earnings and local costs.

Sasol's revenue is largely denominated in U.S. dollars, either through direct exports or local sales priced against global benchmarks, so the Rand-Dollar exchange rate (USD/ZAR) is a critical lever for their export earnings. A weaker Rand generally boosts their Rand-denominated revenue and profit, but a stronger Rand hurts. The company itself projected the average Rand/Dollar exchange rate for the remainder of 2025 would range between R15.10 and R16.80.

However, the currency remains highly volatile. Other market forecasts for USD/ZAR in 2025 projected a wider short-term range of R18.00-R19.50, driven by global monetary policy and South Africa's domestic structural issues like the power crisis. This volatility creates a need for active hedging, which Sasol does, but it also introduces financial instrument risk.

Here's the quick math on the exchange rate impact:

• A stronger Rand reduces the value of their dollar-based revenue when translated back to Rands.
• A weaker Rand increases the Rand cost of imported equipment and loan repayments denominated in US dollars.

High domestic inflation and interest rates increase operating and borrowing costs.

The domestic economic environment in South Africa presents a mixed bag of cost pressures and potential relief. The good news is that Sasol's management has been disciplined, keeping cash fixed cost increases below the domestic inflation rate in FY2025.

On the borrowing side, the South African Reserve Bank (SARB) provided some relief in 2025. The SARB cut its benchmark repo rate by 25 basis points to 7% in July 2025, which in turn prompted commercial banks to reduce the prime lending rate to 10.50%. This easing helps reduce the cost of servicing their significant debt load, which stood at R65.0 billion ($3.7 billion) net of leases at the end of FY2025.

Still, inflation is a factor. Consumer price inflation in South Africa is forecast to average around 4.5% in 2025, which still pushes up the cost of local raw materials, labor, and services, despite Sasol's internal cost-control efforts.

Sasol's 2025 Free Cash Flow (FCF) is projected to be under pressure due to capital expenditure.

While the long-term outlook for Free Cash Flow (FCF) is always under scrutiny, Sasol actually delivered a strong performance in FY2025. FCF after tax, interest, and capital expenditure saw a significant increase of 75% to R12.6 billion. That's a defintely positive signal of operational efficiency and cost control.

However, the pressure point is the capital expenditure (CAPEX) required for maintenance, regulatory compliance, and the energy transition. For FY2025, the total CAPEX was R25.4 billion, which was a 16% decrease from the prior year, showing management's capital discipline. The challenge is that this CAPEX figure is still nearly double the FCF figure, meaning the company is investing heavily, which is necessary but keeps cash flow tight and delays reaching their dividend trigger.

Here's the breakdown of key financial metrics for FY2025:

What this estimate hides is the ongoing need for large-scale environmental and regulatory spending, especially related to the Secunda plant, which will keep CAPEX elevated for the foreseeable future. The net debt of $3.7 billion remains above the board's target of below $3 billion for a sustained dividend payout.

Next step: Operations team, provide a detailed breakdown of the R25.4 billion CAPEX by project category by Friday.

Sasol Limited (SSL) - PESTLE Analysis: Social factors

Significant pressure to address high local unemployment through job creation.

Sasol Limited operates in a South African context where high youth unemployment (ages 15-34) remains a severe systemic challenge, demanding collaborative action from large corporations. The company is a massive economic anchor in its fenceline communities; for instance, in the Govan Mbeki local municipality, Sasol South Africa (SSA) operations support an estimated 55.0% of employment, and in Metsimaholo, this figure is almost 75%. This concentration of economic reliance places immense pressure on Sasol to maintain and grow its workforce, especially as it transitions its business model.

To mitigate this, Sasol has an integrated approach focusing on skills development, workplace experience, and small business development. In the past year, Sasol was recognised as one of South Africa's top ten largest investors in corporate social responsibility (CSI) and impact, allocating 2% of its net profit after tax to social impact initiatives. The new two-year Graduate Internship Programme, targeting youth in operational and fenceline communities, saw its first cohort of graduates begin internships in July 2025. That's a clear, actionable step.

Here's the quick math on the scale of Sasol's employment impact (based on 2023 data, which frames the 2025 context):

Focus on just transition principles for communities affected by decarbonization.

Sasol's decarbonization pathway, which includes reducing coal feedstock by 25% by 2030, will defintely have negative socio-economic consequences for its workforce, communities, and suppliers. The company is committed to a 'just transition' (a framework ensuring the shift to a low-carbon economy is fair and inclusive), aligning with South Africa's Presidential Climate Commission (PCC) Just Transition Framework.

The company established a Just Transition Office (JTO) to coordinate its socio-economic activities, which is currently focused on the framework development phase. What this estimate hides is the sheer difficulty of replacing coal-related jobs with 'green economy' opportunities at the required scale and speed. The transition risk is not just environmental, but a massive social stability risk in their core operating areas.

Key focus areas for the Just Transition Office include:

• Developing skills for work and entrepreneurship.
• Scaling the Bridge to Work programme for youth employability.
• Investing in research for future green economy skills.
• Co-creating opportunities with key stakeholders.

Maintaining a strong social license to operate amid environmental concerns is critical.

The company's social license to operate is intrinsically linked to its environmental performance, particularly concerning its high greenhouse gas (GHG) emissions and the risk of litigation related to environmental, social, and governance (ESG) issues. Sasol acknowledges an increased risk of challenges to its environmental licenses, which could adversely impact the resilience of its operations.

The company's immense contribution to local services often fills the gap left by struggling municipal services, which helps maintain community support. A 2024 community survey in Sasolburg and Secunda found that over 70% of residents believe their lives would be worse off without Sasol's interventions, highlighting their vital role in community stability. Sasol's combined Scope 1, 2, and 3 emissions for FY2025 stood at an estimated 94,937,694 tCO2e, demonstrating the scale of the environmental challenge that constantly tests its social acceptance.

Labor relations and wage negotiations in South Africa pose ongoing operational risks.

Labor stability is a persistent operational risk, especially given the complex relationship with major trade unions like the Association of Mineworkers and Construction Union (AMCU). Recent industrial action underscores this volatility. In March 2025, AMCU members embarked on a strike over a dispute concerning the implementation of a 4-shift work system and the remuneration rates for Sunday work at one of the plants.

This dispute, which involved a strike notice issued in February 2025 and subsequent industrial action, highlights that even non-wage, operational changes can quickly escalate into significant disruptions. Sasol's policy encourages its suppliers and contractors to pay market-related and competitive rates to mitigate industrial action and maintain site-wide labor harmony. The company must manage a delicate balance between operational optimization (like the shift system change) and the expectations of its collective bargaining units. Sasol's cash fixed cost increases were contained below inflation in the 2025 fiscal year, which is great for the balance sheet, but it adds pressure to future wage negotiations.

Sasol Limited (SSL) - PESTLE Analysis: Technological factors

Major investment in green hydrogen and Power-to-X technologies for future fuel mix.

Sasol is making a calculated, but not reckless, push into green hydrogen and Power-to-X (PtX) technologies, which turn renewable electricity into synthetic fuels and chemicals. To be fair, the company is not rushing to be the first mover, as CEO Simon Baloyi noted in January 2025, citing the high cost and risk of new technology. Still, the long-term strategic direction is clear: a shift toward lower-carbon feedstocks. The company has already concluded a final investment decision to produce green hydrogen at its Sasolburg facilities.

A key enabler for this shift is a massive ramp-up in renewable energy capacity. The company has increased its renewable energy target to more than 2 GW (Gigawatts), up from a previous 1.2 GW goal. As of August 2025, Sasol had secured approximately 920 MW of this capacity through a mix of Power Purchase Agreements and self-build projects. This is a defintely necessary step to power future PtX assets, like the Sustainable Aviation Fuel (SAF) projects being pursued in partnership with others.

• Secured 920 MW of renewable energy capacity as of August 2025.
• Targeting >2 GW of renewable energy capacity by 2030.
• Exploring the massive Boegoebaai green hydrogen hub project.

Need to continuously upgrade and maintain aging Secunda Synfuels complex infrastructure.

The technological challenge at the Secunda Synfuels complex, the world's largest single-site emitter, is not just about new tech, but about maintaining and optimizing the current infrastructure. The core problem impacting production in the 2025 fiscal year was the deteriorating quality of the coal feedstock, which reduced gasifier availability and yield. This poor coal quality has led to damaged equipment and longer downtimes.

Sasol is addressing this with a low-risk, cost-effective technological solution: a destoning project at the Twistdraai Export Plant, which is being repurposed. This project, costing less than R1 billion, is expected to be in beneficial operation in the first half of the 2026 financial year (H1 FY26). This, combined with other maintenance interventions, is projected to help ramp up Secunda Operations production to more than 7.4 million tons by FY2028. Separately, a significant upgrade of two 9E gas turbines at the Secunda power facility was completed in May 2025, reducing Nitrogen oxide (NOx) emissions by 75% and cutting CO₂ emissions by approximately 10,000 metric tonnes per turbine each year. That's smart maintenance.

Advancements in carbon capture and storage (CCS) are crucial for decarbonization targets.

Advancements in Carbon Capture and Storage (CCS) technology are crucial in theory for a coal-heavy company, but Sasol's revised strategy shows a diminished near-term reliance on it. The company's Optimised Emissions Reduction Roadmap (ERR) still commits to a 30% reduction in Scope 1 and 2 greenhouse gas (GHG) emissions by 2030 (off a 2017 baseline). However, the total capital expenditure (capex) budget for emission reduction projects over the coming five years has been drastically cut by 70%, now standing at between R4 billion and R7 billion.

This revised plan relies less on large-scale, unproven CCS and more on renewable energy, operational efficiencies, and market-based mechanisms (carbon offsets). Critics like Just Share have raised concerns about the lack of detailed CCS plans in this new roadmap. The financial pressure from carbon pricing is real, though; Sasol's net 2025 carbon tax payment for 2024 emissions was R1.7 billion after offsets and electricity levies.

Leveraging digitalization and AI to optimize complex production processes.

Digitalization is a quiet but critical technological factor for Sasol, focused on optimizing their incredibly complex, integrated value chain. They are moving forward with a modern Enterprise Resource Planning (ERP) program, successfully completing the SAP S4/Hana pilot go-live in Italy in April 2025, marking the first implementation in International Chemicals. This is the foundation for better data-driven decision-making across the global business.

Beyond ERP, the company is actively exploring the use of Artificial Intelligence (AI) to drive value. A dedicated innovation team has been developing a significant number of generative AI use cases-between 10 and 30-to automate and optimize processes. This is where the real efficiency gains will come from, especially in a business with such high operational complexity. They are using advanced models like GPT4 with semantic search to automate tasks, which is how you get ahead of the curve in a commodity business.

Sasol Limited (SSL) - PESTLE Analysis: Legal factors

Compliance with stringent air quality standards and emissions limits in South Africa

You are watching a high-stakes legal battle play out in real-time, one that directly impacts Sasol's license to operate its core assets. The biggest legal risk for the company right now centers on its compliance with South Africa's Minimum Emission Standards (MES) for its Secunda operations, which is the world's largest single-site source of industrial point-source greenhouse gas emissions. The critical compliance deadline for the stricter 2020 MES was March 31, 2025.

Sasol has been actively seeking regulatory relief, arguing that the cost and technical difficulty of retrofitting its existing coal-fired boilers, particularly for sulfur dioxide ($\text{SO}_2$) abatement, is too high. The company successfully appealed a decision by the National Air Quality Officer (NAQO), securing a crucial, albeit controversial, alternative limit from the Minister of Forestry, Fisheries and the Environment. This decision, granted in April 2024, permits Sasol to use a load-based limit for $\text{SO}_2$ emissions at its 17 Secunda coal-fired boilers.

Here's the quick math on the regulatory compromise:

• Legislated MES (Concentration-based): $1000 \text{ mg/Nm}^3$ for $\text{SO}_2$.
• Minister-Granted Limit (Load-based): 503 tonnes of $\text{SO}_2$ per day.
• Duration of Alternative Limit: April 1, 2025, to March 31, 2030.

What this estimate hides is the condition that this alternative $\text{SO}_2$ limit will be withdrawn if Sasol fails to comply with the MES for other pollutants, specifically particulate matter (PM) and oxides of nitrogen ($\text{NO}_x$), by the March 31, 2025 deadline. The company has already committed significant capital, spending over R7 billion in the past year (as of July 2023) on curbing emissions at its Secunda, Sasolburg, and Natref plants, but the $\text{SO}_2$ challenge remains the central legal and financial threat.

Navigating international trade laws and sanctions affecting global chemical sales

Operating a global chemicals business means constantly navigating a complex and shifting web of international trade laws, export controls, and sanctions. For a company with significant international chemicals sales, especially in the US and Eurasia, this is a non-negotiable compliance area.

The legal and geopolitical environment directly impacted Sasol's Fiscal Year 2025 outlook. For instance, the uncertainty surrounding ongoing global tariff disputes, including US government changes to import tariffs announced in April 2025, forced a revision in guidance. The company's full-year outlook for International Chemicals sales volumes was revised to the lower end of the previous guidance, indicating a potential 4-8% decrease compared to FY24.

Sasol's Code of Conduct explicitly requires adherence to:

• Trade controls and international sanctions laws.
• Anti-bribery and anti-corruption laws.
• Competition (antitrust) laws.

The company maintains policies to ensure that its transactions, including those with suppliers, comply with sanctions imposed by authorities like the United Nations, European Union, and the US Government. You have to be defintely vigilant here; one misstep on a sanctioned entity can trigger massive fines and reputational damage from US regulators.

Adherence to evolving corporate governance and anti-corruption legislation

As a dual-listed entity on both the Johannesburg Stock Exchange (JSE) and the New York Stock Exchange (NYSE), Sasol is subject to two distinct, stringent regulatory regimes. This dual listing is a major driver of its corporate governance structure, forcing it to comply with both the South African Companies Act and the US Sarbanes-Oxley Act of 2002 (SOX).

The Board confirmed its satisfaction that it fulfilled all its duties and obligations in the 2025 financial year, which is a critical statement for investors. The focus on anti-corruption is perpetual, particularly in jurisdictions where Sasol operates, such as Mozambique and South Africa, which have historically presented higher corruption risks. The company's governance framework prioritizes key legal compliance risk areas:

The robust framework is there, but the real test is consistent enforcement of its Code of Conduct across all global subsidiaries, which is where most anti-corruption breaches occur.

Complex permitting and licensing for new energy projects, like gas exploration

The legal and regulatory environment for new energy projects, especially cross-border gas exploration and production, is notoriously complex. Sasol's strategic focus on natural gas, particularly in Mozambique, is heavily dependent on securing and maintaining long-term licenses and production agreements.

The company's key development is the Mozambique Production Sharing Agreement (PSA) project, which focuses on the Inhassoro, Temane, and Pande gas fields. This project, with a committed investment of approximately \$1 billion, was targeted to be activated by September 2025. The purpose is two-fold: to supply gas to the 450-megawatt Central Térmica de Temane (CTT) power plant in Mozambique and to export the balance to South Africa via the existing ROMPCO pipeline.

The permitting challenge is amplified by the trans-boundary nature of the project and the need to manage the decline of the mature Pande and Temane fields. Beginning mid-2026, Sasol is projected to reduce gas exports to South Africa as it redirects volumes to downstream Mozambique facilities, which creates a legal and contractual supply gap risk for its South African industrial customers. At full capacity, the PSA fields are expected to yield 53 million megajoules of natural gas annually and 4,000 barrels of light oil per day, but hitting these production targets hinges on flawless execution of the permitting and licensing schedule.

Sasol Limited (SSL) - PESTLE Analysis: Environmental factors

Sasol targets a 30% reduction in greenhouse gas emissions by 2030, requiring massive capital outlay.

You're watching Sasol's decarbonization strategy closely, and the big takeaway from their May 2025 Capital Markets Day is a pivot: the 30% reduction in Scope 1 and 2 greenhouse gas (GHG) emissions by 2030 (off a 2017 baseline) is still their firm target, but the capital required has been drastically cut. They've announced a dramatic 70% reduction in the associated capital expenditure (CapEx) budget.

The original plan called for a massive outlay of between R15 billion and R25 billion in aggregate transformation capital up to 2030. The revised roadmap, however, now projects an investment of only between R4 billion and R7 billion on emission-reduction projects over the coming five years. This is a huge shift, achieved primarily by abandoning capital-intensive solutions like coal fines briquetting and repurposing assets, such as converting the Twistdraai export coal plant into a 10-million-ton-a-year destoning operation to improve coal quality at Secunda Operations.

The revised strategy leans heavily on renewable energy procurement, increasing the target from 1.2 GW to 2 GW, with 575 MW already secured through Power Purchase Agreements (PPAs). That's a smart move to cut costs. Here's the quick math on the CapEx change:

The increasing cost of the South African carbon tax directly hits the bottom line.

The South African carbon tax has been a major financial risk, but recent legislative changes have provided significant near-term relief. The National Treasury's March 2025 Budget Review confirmed a crucial concession: the 60% basic tax-free allowance will be retained until at least the end of 2030. This retention, instead of the previously proposed step-down starting in 2026, offers Sasol greater investment certainty and a slower ramp-up of costs.

Still, the tax is a real cost. Sasol's carbon tax bill was recently reported at approximately R1.8 billion, which is relatively small for a company that emits around 64,000 kilotons of CO2 annually. To manage this liability, the company is increasingly relying on carbon credits. For the fiscal year ended June 2025, Sasol's carbon credit purchases surged to R723 million, a 25% increase year-on-year. This flexibility is key, but it defintely delays the deep, structural decarbonization needed.

Water scarcity and management are critical issues for its large-scale operations.

Water is a critical, high-risk factor, especially since 88% of Sasol's total water use is concentrated in its South African operations, which are located in water-stressed regions like the Upper Vaal Catchment. Sasolburg Operations (SO) has a specific, measurable target for the 2025 fiscal year.

Their focus is on reducing fresh-water dependence by maximizing re-use and effluent use. This is a must-do in a country facing a major water crisis.

• Reduce fresh-water usage at Sasolburg by 7.5% by the end of 2025 (FY21 baseline).
• The maximum target consumption for Sasolburg is 50 ML/day.
• The average water intensity for Sasolburg in FY24 was 11.72 $m^3/t$ (cubic meters of water per ton of total production), which was above the FY25 target, showing a challenge in meeting efficiency goals due to increased steam demands.

Pressure from investors to divest from high-carbon assets and accelerate the energy transition.

Investors want a clearer, faster path away from high-carbon assets, and they want to see capital discipline. Sasol is responding through a dual strategy: optimizing its existing high-carbon base while selectively divesting non-core, carbon-intensive assets.

The company's 2025 strategy update was a conscious effort to balance investor demands for a 'just transition' with the financial reality of its coal-to-liquids (CTL) assets. They are increasing coal output at Secunda to over 7.4 million tonnes to improve plant stability and profitability, which is a near-term counter-intuitive move but one that improves cash flow for long-term transition funding.

To show commitment to portfolio simplification and margin improvement, which is a form of 'soft' divestment pressure response, Sasol has been actively optimizing its International Chemicals portfolio:

• Exited the US Phenolics business in March 2025.
• Completed clean-up activities for the Alkylphenol plant in Marl, Germany, and the Guerbet plant in Lake Charles, US.
• Stopped production at the Phenolics plants in Texas, US, and the HF LAB plant in Augusta, Italy, in Q1 FY26 (ending September 2025).

These actions cut complexity and capital risk, which is what the market is defintely demanding.