Wrap Text
Results for the quarter ended 30 September 2012
DRDGOLD LIMITED
(Incorporated in the Republic of South Africa) Registration No. 1895/000926/06
JSE share code: DRD ISIN: ZAE 000058723 Issuer code: DUSM
NYSE trading symbol: DRD ("DRDGOLD" or "the Group")
RESULTS FOR THE QUARTER ENDED
30 SEPTEMBER 2012 (Q1 FY2013)
KEY FEATURES FROM CONTINUING OPERATIONS
- Gold production up 11% to 35 815 oz
- Gold revenue up 34% to R526.8 million
- Operating profit up 51% to R173.7 million
Quarter Quarter % change Quarter % change
Q1 2013
Group Sep 2012 Jun 2012 Sep 2011 vs Q1 2012
Gold production
Continuing operations oz 35 815 32 216 11 34 562 4
kg 1 114 1 002 11 1 075 4
Discontinued operations oz 12 023 29 000
kg 374 902
Group oz 35 815 44 239 (19) 63 562 (44)
kg 1 114 1 376 (19) 1 977 (44)
Gold production sold
Continuing operations oz 37 905 29 966 26 36 523 4
kg 1 179 932 26 1 136 4
Discontinued operations oz 10 737 29 000
kg 334 902
Group oz 37 905 40 703 (7) 65 523 (42)
kg 1 179 1 266 (7) 2 038 (42)
Cash operating costs
Continuing operations US$ per oz 1 151 1 161 (1) 1 141 1
ZAR per kg 305 265 302 221 1 260 189 17
Discontinued operations US$ per oz 1 590 1 502
ZAR per kg 432 307 342 642
Group US$ per oz 1 151 1 278 (10) 1 305 (12)
ZAR per kg 305 265 337 579 (10) 297 808 3
Gold price received US$ per oz 1 685 1 575 7 1 734 (3)
ZAR per kg 446 783 421 834 6 395 568 13
Capital expenditure US$ million 9.7 11.7 (17) 9.9 (2)
ZAR million 79.6 94.6 (16) 77.9 2
Stock
Issued capital
385 383 767 ordinary no par value shares
6 205 559 treasury shares held within the group
5 000 000 cumulative preference shares
Total ordinary no par value shares issued and
committed: 404 486 078
Stock traded JSE NYSE*
Average volume for the quarter per day ('000)
% of issued stock traded (annualised) 381 372
Price - high 26 25
- low R5.49 $0.671
- close R4.49 $0.535
R5.40 $0.635
* This data represents per share data and not ADS data one ADS reflects 10 ordinary shares.
Forward-looking statements
Many factors could cause the actual results, performance or achievements to be materially different from
any future results, performance or achievements that may be expressed or implied by such forward-looking
statements, including, among others, adverse changes or uncertainties in general economic conditions in the
markets we serve, a drop in the gold price, a sustained strengthening of the Rand against the Dollar, regulatory
developments adverse to DRDGOLD or difficulties in maintaining necessary licenses or other governmental
approvals, changes in DRDGOLD's competitive position, changes in business strategy, any major disruption in
production at key facilities or adverse changes in foreign exchange rates and various other factors.
These risks include, without limitation, those described in the section entitled "Risk Factors" included in our
annual report for the fiscal year ended 30 June 2011, which we filed with the United States Securities and
Exchange Commission on 28 October 2011 on Form 20-F. You should not place undue reliance on these
forward-looking statements, which speak only as of the date thereof. We do not undertake any obligation to
publicly update or revise these forward-looking statements to reflect events or circumstances after the date
of this report or to the occurrence of unanticipated events. Any forward-looking statement included in this
report have not been reviewed and reported on by DRDGOLD's auditors.
Dear shareholder
Our Group results for the first quarter of the 2013 financiaI year are the first to reflect the performance of DRDGOLD as a
gold surface retreatment-focused company. Control of Blyvooruitzicht Gold Mining Company Limited (Blyvoor) passed fully
to Village Main Reef Limited (Village) during the previous quarter, and therefore these results are not directly comparable
with those of the previous quarter.
It is all the more pleasing, therefore, to report that we have made a strong start to the new financial year, recording
continued improvement by our consolidated surface retreatment operation, Ergo, in a number of key areas in the quarter
under review.
By way of brief introduction to more detailed commentary below on Ergo's operating and financial performance, gold
production rose by 11% on the previous quarter, reflecting improvement in both throughput and yield. The volume increase
flowed from continued, satisfactory progress in bringing together the various components contained within Ergo's very
large geographical footprint.
The increase in gold production, together with a higher average rand gold price received, resulted in a 34% increase in gold
revenue to R526.8 million. Although cash operating costs rose by 12% to R340.1 million due mainly to the higher cost
of power and the annual wage increase for employees coming into effect, we delivered a 51% improvement in operating
profit to R173.7 million. Headline earnings per share decreased by 2 South African (SA) cents to 20 SA cents, the previous
quarter's earnings having been boosted by a substantial non-cash, deferred tax credit.
A feature of Ergo's aforementioned consolidation has been the introduction by management of a number of health, safety
and environmental initiatives to familiarise members of the integrated workforce with the requirements of their enlarged
working environment. We expect the proactive work being done in the area of safety to address some deterioration in key
parameters we have noted during the quarter under review.
Detailed operational review
Continuing operations (Ergo)
Q1 2013 v Q4 2012
Gold production rose by 11% to 35 815oz, a consequence both of a 1% increase in throughput to 5 598 000t and of an 11% increase
in yield to 0.20g/t. While the former reflects continuing stabilisation in the operating performance of the Crown-Ergo pipeline and
completion of the closure of the Crown plant, the latter is a consequence of a significant improvement in the yield of material recovered
from the Cason Dump.
Cash operating costs were well contained to a 1% increase at R305 265/kg, notwithstanding two months' payment of power utility
Eskom's winter tariff a 60% premium to the normal rate and implementation of wage increases.
Operating profit increased by 51% to R173.7 million due both to the rise in gold production and a 6% increase in the average rand gold
price received to R446 783/kg.
Capital expenditure, 6% higher at R81.4 million, was directed mainly towards the flotation/fine-grind project, which is progressing on
schedule and on budget.
Q1 2013 v Q1 2012
Gold production was up 4% from 34 562oz as a result of a 7% increase in throughput from 5 231 000t, which was partially offset by a
5% decline in yield from 0.21g/t. Higher throughput reflects the positive impact of the Crown-Ergo pipeline coming on stream.
Cash operating costs rose 17% from R260 189/kg, due mainly to electricity price and wage increases as well as higher throughput.
Operating profit increased by 11% from R156.5 million, a consequence both of higher production and a 13% increase in the average
rand gold price received from R395 568/kg.
EXPLORATION
Exploration activity in Zimbabwe during the quarter remained focused on the John Bull, Leny and Ascot targets at Norton on Zimbabwe's
Greenstone Belt, the KT target at Gweru and the Guinea Fowl River alluvial target.
Commissioning of the alluvial gold recovery plant at Guinea Fowl River has started, and we should be able to form a high-level view of
the potential of this asset by March 2013.
Over the next few months, we will evaluate the economic viability of a number of surface tailings dumps as a stand-alone circuit.
Looking AHEAD
Our two principal priorities for the foreseeable future remain to bring steady state to our consolidated Ergo circuit, and delivering on the
timeline of the fine-grind project. Our uranium feasibility study is continuing, and we await the outcome of testwork being done on our
behalf by Mintek.
Alongside all of this, there is also the continued subject matter of our sustainable development focus areas as reported earlier, specifically
that of water consumption and human and social development. Both of these will remain at the forefront of our strategic planning and
implementation. We invite all to access and read our sustainable development report which we posted on our website.
Niël Pretorius Chief executive officer
25 October 2012
The condensed consolidated financial statements are prepared in accordance with the recognition and measurement principles
of International Financial Reporting Standards (IFRS), and South African Statements and Interpretations of Statements of Generally
Accepted Accounting Practice (AC 500 Series). The accounting policies adopted are in line with IFRS and are consistent with those applied
in the annual financial statements for the year ended 30 June 2012.
CONDENSED Quarter Quarter Quarter
Statement of comprehensive income Sep 2012 Jun 2012 Sep 2011
Rm Rm Rm
Unaudited Unaudited Unaudited
Gold and silver revenue 526.8 393.5 449.6
Net operating costs (353.1) (278.7) (293.1)
Cash operating costs (340.1) (302.8) (279.7)
Movement in gold in process (13.0) 24.1 (13.4)
Operating profit 173.7 114.8 156.5
Depreciation (34.2) (29.7) (27.2)
Movement in provision for environmental rehabilitation (10.0) (36.6) (7.1)
Retrenchment costs
Net operating profit 129.5 48.5 122.2
Impairments (1.1)
Environmental rehabilitation costs (17.2) (10.0) (14.5)
Corporate, administration and other expenses (34.0) (45.0) (25.6)
Share-based payments (0.3) (0.6) (0.4)
Net loss on financial liabilities measured at amortised cost (0.3)
Profit/(loss) on disposal of assets 2.5 (9.6)
Finance income 33.6 7.8 5.4
Finance expenses (4.0) 0.1 (4.5)
Profit/(loss) before taxation 110.1 (9.9) 82.3
Income tax 9.9 8.6 (5.8)
Deferred tax (26.7) 77.7 (34.6)
Net profit for the period 93.3 76.4 41.9
Discontinued operations
(Loss)/profit for the period from discontinued operations (1.5) 41.2
Loss on sale of subsidiary (10.5)
Net profit for the period 93.3 64.4 83.1
Attributable to:
Equity owners of the parent 78.6 58.1 75.4
Non-controlling interest 14.7 6.3 7.7
93.3 64.4 83.1
Other comprehensive income
Foreign exchange translation and other 4.9 (2.2) (2.6)
Net gain/(loss) on disposal of an available-for-sale financial asset 0.3 (6.7)
Mark-to-market of available-for-sale investments (36.3) 19.2
Total comprehensive income for the period 62.2 74.7 80.5
Attributable to:
Equity owners of the parent 47.5 69.4 72.8
Non-controlling interest 14.7 5.3 7.7
62.2 74.7 80.5
CONDENSED Quarter Quarter Quarter
Statement of comprehensive income Sep 2012 Jun 2012 Sep 2011
Rm Rm Rm
Unaudited Unaudited Unaudited
Reconciliation of headline earnings
Net profit 78.6 58.1 75.4
Adjusted for:
Impairments 1.1
(Profit)/loss on disposal of assets (2.5) 9.6
Taxation thereon 0.5 1.7
Loss on sale of subsidiary 10.5
Net gain on disposal of an available-for-sale financial asset reclassified
from equity (6.7)
Non-controlling interest in headline earnings adjustment 0.6 4.9
Headline earnings 77.2 79.2 75.4
Headline earnings per share cents
From continuing operations 20 22 12
From total operations 20 21 20
Basic earnings per share cents
From continuing operations 21 18 12
From total operations 21 15 20
Diluted headline earnings per share cents 20 21 20
Diluted basic earnings per share cents 21 15 20
Calculated on the weighted average ordinary shares issued of: 379 178 208 382 373 999 384 884 379
CONDENSED As at As at As at
Statement of financial position 30 Sep 2012 30 Jun 2012 30 Sep 2011
Rm Rm Rm
Unaudited Audited Unaudited
Assets
Non-current assets 1 999.0 2 021.6 1 817.4
Property, plant and equipment 1 692.8 1 641.6 1 599.0
Non-current investments and other assets 125.7 176.1 25.1
Environmental rehabilitation trust funds and investments 174.1 165.6 136.0
Deferred tax asset 6.4 38.3 57.3
Current assets 712.8 470.6 599.8
Inventories 91.8 105.8 115.1
Trade and other receivables 211.1 66.3 190.8
Cash and cash equivalents 409.9 298.5 293.9
Total assets 2 711.8 2 492.2 2 417.2
Equity and liabilities
Equity 1 657.6 1 633.9 1 271.2
Equity of the owners of the parent 1 416.2 1 497.2 1 291.6
Non-controlling interest 241.4 136.7 (20.4)
Non-current liabilities 753.6 597.3 689.5
Loans and borrowings 166.0 40.0
Post-retirement and other employee benefits 6.1 6.0 6.4
Provision for environmental rehabilitation 513.8 504.3 497.8
Deferred tax liability 67.7 87.0 145.3
Current liabilities 300.6 261.0 456.5
Trade and other payables 269.8 230.3 375.8
Loans and borrowings 30.8 30.7 80.7
Total equity and liabilities 2 711.8 2 492.2 2 417.2
CONDENSED Quarter Quarter Quarter
Statement of changes in equity Sep 2012 Jun 2012 Sep 2011
Rm Rm Rm
Unaudited Unaudited Unaudited
Balance at the beginning of the period 1 633.9 1 482.7 1 219.2
Share capital issued (0.3) (0.5)
for costs (0.3) (0.5)
Increase in share-based payment reserve 0.3 1.4 0.4
Net profit attributable to equity owners of the parent 78.6 58.1 75.4
Net profit attributable to non-controlling interest 14.7 6.3 7.7
Disposal of subsidiary attributable to non-controlling interest 97.5
Dividends declared (38.5) (28.9)
Treasury shares acquired (21.9)
Fair value adjustment on available-for-sale investments (36.3)
Other comprehensive income 5.2 10.3 (2.6)
Balance as at the end of the period 1 657.6 1 633.9 1 271.2
CONDENSED Quarter Quarter Quarter
Statement of cash flows Sep 2012 Jun 2012 Sep 2011
Rm Rm Rm
Unaudited Unaudited Unaudited
Net cash inflow from operations 32.0 116.2 117.9
Net cash outflow from investing activities (85.3) (171.5) (83.1)
Net cash in/(out)flow from financing activities 164.7 (26.0)
Loans and other 164.7 (4.1)
Treasury shares acquired (21.9)
Increase/(decrease) in cash and cash equivalents 111.4 (81.3) 34.8
Opening cash and cash equivalents 298.5 379.8 259.1
Closing cash and cash equivalents 409.9 298.5 293.9
Reconciliation of net cash inflow from operations
Profit/(loss) before taxation 110.1 (9.9) 82.3
(Loss)/profit before taxation from discontinued operations (1.5) 41.2
110.1 (11.4) 123.5
Adjusted for:
Movement in gold in process 13.0 (35.1) 14.9
Depreciation and impairment 34.2 29.1 27.8
Movement in provision for environmental rehabilitation 10.0 36.5 7.3
Share-based payments 0.3 1.4 0.4
Loss on financial liabilities measured at amortised costs 0.3
(Profit)/loss on disposal of assets (2.5) 9.6
Finance expense and unwinding of provisions 1.1 (0.6) 2.7
Growth in Environmental Trust Funds (1.5) (2.8) (1.7)
Other non-cash items (1.9) (5.7) (1.7)
Taxation refund/(paid) 7.0 (7.1)
Working capital changes (137.8) 102.3 (55.6)
Net cash inflow from operations 32.0 116.2 117.9
CONTINUING OPERATIONS KEY OPERATING AND FINANCIAL RESULTS (Unaudited) Metric Imperial
Ore milled (t000) Sep 2012 Qtr 5 598 6 170
Jun 2012 Qtr 5 525 6 090
yield (g/t) (oz/t) Sep 2012 Qtr 0.20 0.006
Jun 2012 Qtr 0.18 0.005
Gold produced (kg)/(oz) Sep 2012 Qtr 1 114 35 815
Jun 2012 Qtr 1 002 32 216
Cash operating costs (ZAR/kg) (us$/oz) Sep 2012 Qtr 305 265 1 151
Jun 2012 Qtr 302 221 1 161
Cash operating costs (ZAR/t) (us$/t) Sep 2012 Qtr 61 7
Jun 2012 Qtr 55 6
Gold and silver revenue (ZAR million) (us$ million) Sep 2012 Qtr 526.8 63.9
Jun 2012 Qtr 393.5 48.1
Operating profit/(loss) (ZAR million) (us$ million) Sep 2012 Qtr 173.7 21.1
Jun 2012 Qtr 114.8 13.8
Capital expenditure (ZAR million) (us$ million) Sep 2012 Qtr 79.6 9.7
Jun 2012 Qtr 82.5 10.3
CONTINUING OPERATIONS CASH OPERATING COSTS RECONCILIATION
R million unless otherwise stated
Total cash costs Sep 2012 Qtr 406.0
Jun 2012 Qtr 328.5
Movement in gold in process Sep 2012 Qtr (13.0)
Jun 2012 Qtr 24.1
Less: Assessment rates, rehabilitation and other Sep 2012 Qtr 33.6
Jun 2012 Qtr 22.2
Less: Corporate and general administration costs Sep 2012 Qtr 19.3
Jun 2012 Qtr 27.6
Cash operating costs Sep 2012 Qtr 340.1
Jun 2012 Qtr 302.8
Gold produced (kg) Sep 2012 Qtr 1 114
Jun 2012 Qtr 1 002
Total cash operating costs (R/kg) Sep 2012 Qtr 305 265
Jun 2012 Qtr 302 221
Total cash operating costs (us$/oz) Sep 2012 Qtr 1 151
Jun 2012 Qtr 1 161
DIRECTORS (*British)(**American)
Executives: DJ Pretorius (Chief executive officer),
CC Barnes (Chief financial officer)
Independent non-executives: GC Campbell* (Non-executive chairman),
RP Hume, EA Jeneker, J Turk**
Company secretary: TJ Gwebu
For further information, contact Niël Pretorius at:
Tel: +27 (0)11 470 2600 Fax: +27 (0)11 470 2618
Web: http://www.drdgold.com
Quadrum Office Park Building 1 50 Constantia Boulevard
Constantia Kloof Ext 28 South Africa
PO Box 390 Maraisburg 1700 South Africa
Date: 25/10/2012 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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