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Report to shareholders for the quarter and nine months ended 31 March 2013
DRDGOLD LIMITED
(Incorporated in the Republic of South Africa)
Registration No. 1895/000926/06 / JSE share code: DRD ISIN: ZAE 000058723
NYSE trading symbol: DRD
("DRDGOLD" or "the Group")
REPORT TO SHAREHOLDERS
for the quarter and nine months ended 31 March 2013
GROUP RESULTS: KEY FEATURES
FOR THE QUARTER Q3 2013 v Q3 2012
- Gold production up 3% to 35 976 oz
- Gold revenue up 16% to R531.0 million
- Operating profit up 5% to R170.7 million
- Cash operating costs up 3% to US$1 111/oz
- Headline earnings up 17% to 14 cps
FOR THE NINE MONTHS FY2013 v FY2012
- Gold production up 7% to 110 822 oz
- Gold revenue up 20% to R1 638.4 million
- Operating profit up 15% to R583.1 million
- Cash operating costs up 1% to US$1 091/oz
- Headline earnings up 51% to 59 cps
All figures used in this report represent continuing operations, unless specified otherwise.
REVIEW OF OPERATIONS
Quarter Quarter % change Quarter 9 months to 9 months to % change
Mar 2013 Mar 2012 Dec 2012 31 Mar 2013 31 Mar 2012
Gold production
Continuing operations oz 35 976 34 947 3 39 031 110 822 103 492 7
kg 1 119 1 087 3 1 214 3 447 3 219 7
Discontinued operations oz 25 946 84 622
kg 807 2 632
Group oz 35 976 60 893 (41) 39 031 110 822 188 114 (41)
kg 1 119 1 894 (41) 1 214 3 447 5 851 (41)
Gold production sold
Continuing operations oz 35 976 34 947 3 39 031 112 912 105 453 7
kg 1 119 1 087 3 1 214 3 512 3 280 7
Discontinued operations oz 25 946 84 622
kg 807 2 632
Group oz 35 976 60 893 (41) 39 031 112 912 190 075 (41)
kg 1 119 1 894 (41) 1 214 3 512 5 912 (41)
Cash operating costs
Continuing operations US$ per oz 1 111 1 074 3 1 017 1 091 1 075 1
ZAR per kg 319 065 267 044 19 284 425 302 405 263 614 15
Discontinued operations US$ per oz 1 391 1 378
ZAR per kg 346 875 338 341
Group US$ per oz 1 111 1 209 (8) 1 017 1 091 1 211 (10)
ZAR per kg 319 065 301 059 6 284 425 302 405 297 229 2
Notional cash expenditure*
Continuing operations US$ per oz 1 423 1 225 16 1 323 1 387 1 268 9
ZAR per kg 408 272 304 972 34 369 632 384 475 311 376 23
Discontinued operations US$ per oz 1 496 1 487
ZAR per kg 372 914 365 239
Group US$ per oz 1 423 1 340 6 1 323 1 387 1 367 1
ZAR per kg 408 272 333 921 22 369 632 384 475 335 606 15
Gold price received US$ per oz 1 647 1 691 (3) 1 714 1 683 1 702 (1)
ZAR per kg 474 482 421 420 13 478 309 466 506 417 832 12
Capital expenditure US$ million 11.2 8.0 40 11.9 32.8 29.4 12
ZAR million 99.8 62.2 60 103.5 282.9 224.5 26
* Notional cash expenditure (NCE) is defined as cash operating costs plus capital expenditure, which include exploration and growth capital. NCE is reported on a per
kilogram and per ounce basis.
MARKET CAPITALISATION
As at 31 March 2013 (ZARm) 2 759.3 As at 31 December 2012 (ZARm) 2 543.5
As at 31 March 2013 (US$m) 301.4 As at 31 December 2012 (US$m) 292.9
STOCK TRADED JSE NYSE*
Average volume for the quarter per day ('000) 649 1 111
% of issued stock traded (annualised) 44 75
price - High R7.55 $0.859
- Low R6.14 $0.676
- Close R7.16 $0.782
* This data represents per share data and not ADS data one ADS reflects ten ordinary shares
SHAREHOLDERS INFORMATION
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: 389 318 124
DEAR
SHAREHOLDER
As the new Crown/Ergo pipeline continues to settle, increasingly we are starting to understand what to expect from Ergo's current
Brakpan carbon-in-leach ("CIL") circuit in our effort to achieve steady-state performance. Volume delivery into our plants was steady, and
gold production was marginally better than the average quarterly production over the last two years.
Headline earnings per share ("HEPS") in Q3 FY2013 were 17% higher at 14 South African cents compared with Q3 FY2012. This was on
the back of a 16% increase in gold revenue to R531.0 million, flowing both from a 3% increase in gold production to 35 976oz and a
higher average Rand gold price received of R474 482/kg. After accounting for net operating costs of R360.3 million, operating profit was
5% higher at R170.7 million.
Free cash flow in Q3 FY2013 was up 16% from R73.7 million to R85.7 million compared to Q3 FY2012.
Gold production for the first nine months of FY2013 was 7% higher at 110 822oz compared with the first nine months of FY2012.
Together with a higher Rand gold price received of R466 506/kg, this delivered a 20% rise in gold revenue to R1 638.4 million. Cash
operating costs were well contained to US$1 091/oz a 1% increase and operating profit was 15% higher at R583.1 million, yielding
a 51% increase in HEPS to 59 South African cents.
Compared to Q2 FY2013, gold production was down 3 055oz due to marginally lower head-grades into the Brakpan plant.
Total production and free cash flows, namely for both continued and discontinued operations for the nine months to March 2013 are
lower than the comparative period in FY2012 following the disposal of Blyvooruitzicht, in Q4 2012.
DETAILED OPERATIONAL REVIEW
ERGO
Q3 FY2013 V Q3 2012
Gold production was 3% higher at 35 976oz due to a 3% increase in throughput to 5 766 000t. Yield was steady at 0.194g/t. Improved throughput reflects
the positive impact of both continued stabilisation in the operating parameters of the new Crown/Ergo pipeline and de-commissioning of the Crown plant.
Notwithstanding a 3% increase in cash operating unit costs to US$1 111/oz due to increased volumes and annual price increases, operating profit rose
by 5% to R170.7 million, a consequence both of the increase in gold production and a 13% improvement in the average rand gold price received to
R474 482/kg.
Capital expenditure was 60% higher at R99.8 million, reflecting on-going development of the flotation/fine-grind circuit at the Brakpan plant.
First nine months of FY2013 v first nine months of FY2012
An 8% increase in throughput to 17 430 000t offset the effect of a slight decline in yield to 0.198g/t, resulting in a 7% rise in gold production to 110
822oz. The Crown/Ergo pipeline coming on stream and the Crown plant de-commissioning were the primary contributors to higher throughput.
Cash operating unit costs were contained to US$1 091/oz. This, together with the increase in gold production and a 12% strengthening in the average
Rand gold price received to R466 506/kg, resulted in operating profit increasing by 15% to R583.1 million.
Capital expenditure, 26% higher at R282.9 million, was directed mainly towards the flotation/fine-grind project.
ERPM, ZIMBABWE
As reported last quarter, we intend to dispose of our ERPM underground mining asset in South Africa and our exploration assets in Zimbabwe. Various
expressions of interest have been received and these are being assessed, our objective being to secure the best deals that maximise value for shareholders.
LOOKING AHEAD
As we move into the exciting commissioning phase of the new flotation/fine-grind circuit at Ergo's Brakpan plant our first delivery from our ongoing
research and development programme we are cautiously optimistic about this project's ability to deliver into targeted operating and financial
performance. Meantime, as our strategic capital commitments come to an end, we remain focused on maximising the operating and financial capabilities
of the Brakpan plant's CIL circuit. A key element here is improved productivity, both at operational and individual employee level.
Niël Pretorius
Chief Executive Officer
25 April 2013
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 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Quarter Quarter Quarter 9 months to 9 months to
Mar 2013 Mar 2012 Dec 2012 31 Mar 2013 31 Mar 2012
Rm Rm Rm Rm Rm
Unaudited Unaudited Unaudited Unaudited Unaudited
Continuing operations
Gold and silver revenue 531.0 458.3 580.6 1 638.4 1 370.7
Net operating costs (360.3) (296.1) (341.9) (1 055.3) (863.3)
Cash operating costs (357.0) (290.3) (345.3) (1 042.4) (848.6)
Movement in gold in process (3.3) (5.8) 3.4 (12.9) (14.7)
Operating profit 170.7 162.2 238.7 583.1 507.4
Depreciation (34.7) (31.7) (33.9) (102.8) (89.5)
Movement in provision for environmental rehabilitation (19.1) (9.8) (16.2) (45.3) (22.9)
Retrenchment costs (0.6) (0.6)
Net operating profit 116.9 120.7 188.0 434.4 395.0
Environmental rehabilitation costs (11.5) (13.5) (12.5) (41.2) (37.3)
Corporate, administration and other expenses (32.6) (32.5) (36.0) (102.6) (85.1)
Share-based payments (1.4) (0.8) (1.6) (3.3) (2.5)
Net loss on financial liabilities measured at amortised cost (7.1)
Profit on disposal of assets 8.6 0.1 11.2
Finance income 16.1 5.9 8.2 57.9 16.7
Finance expenses (2.8) (2.8) (3.2) (10.0) (8.8)
Profit before taxation 93.3 77.0 143.0 346.4 270.9
Income tax (11.2) 2.9 12.8 (25.6)
Deferred tax (12.4) (8.3) (21.9) (61.0) (68.7)
Profit after taxation 80.9 57.5 124.0 298.2 176.6
Discontinued operations
Profit for the period from discontinued operations 6.9 136.0
Net profit for the period 80.9 64.4 124.0 298.2 312.6
Attributable to:
Equity owners of the parent 62.1 49.9 93.0 233.7 250.6
Non-controlling interest 18.8 14.5 31.0 64.5 62.0
80.9 64.4 124.0 298.2 312.6
Other comprehensive income
Foreign exchange translation and other 1.3 1.4 0.5 6.7 (1.8)
Net gain on an available-for-sale financial asset 0.3
Mark-to-market of available-for-sale investments (10.6) 3.6 (43.3)
Total comprehensive income for the period 71.6 65.8 128.1 261.9 310.8
Attributable to:
Equity owners of the parent 52.8 51.3 97.1 197.4 248.8
Non-controlling interest 18.8 14.5 31.0 64.5 62.0
71.6 65.8 128.1 261.9 310.8
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Quarter Quarter Quarter 9 months to 9 months to
Mar 2013 Mar 2012 Dec 2012 31 Mar 2013 31 Mar 2012
Rm Rm Rm Rm Rm
Unaudited Unaudited Unaudited Unaudited Unaudited
Reconciliation of headline earnings
Net profit 62.1 49.9 93.0 233.7 250.6
Adjusted for
Profit on disposal of assets (8.6) (0.1) (11.2)
Non-controlling interest in headline earnings adjustment 0.9 0.1 1.6
Taxation thereon 0.6 1.1
Headline earnings 55.0 49.9 93.0 225.2 250.6
Headline earnings per share-cents
From continuing operations 14 12 25 59 39
From total operations 14 13 25 59 65
Basic earnings per share-cents
From continuing operations 17 12 25 62 39
From total operations 17 13 25 62 65
Diluted headline earnings per share-cents 14 13 25 59 65
Diluted basic earnings per share-cents 16 13 25 61 65
Calculated on the weighted average ordinary shares issued of: 379 178 208 384 229 290 379 178 208 379 178 208 384 766 369
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at As at As at
31 Mar 2013 30 Dec 2012 31 Mar 2012
Rm Rm Rm
Notes Unaudited Unaudited Unaudited
Assets
Non-current assets 2 180.3 2 105.6 1 735.2
Property, plant and equipment 1 838.4 1 767.9 1 584.2
Non-current Investments and other assets 141.0 141.7 10.8
Environmental rehabilitation trust funds and investments 181.8 182.0 104.8
Deferred tax asset 19.1 14.0 35.4
Current assets 658.3 664.8 798.5
Inventories 111.1 104.1 81.6
Trade and other receivables 136.9 162.3 118.6
Cash and cash equivalents 1 410.3 398.4 379.8
Assets classified as held for sale 218.5
Total assets 2 838.6 2 770.4 2 533.7
Equity and Liabilities
Equity 1 765.8 1 755.2 1 482.7
Equity of the owners of the parent 1 474.6 1 482.8 1 448.8
Non-controlling interest 291.2 272.4 33.9
Non-current liabilities 810.0 778.1 628.2
Loans and borrowings 2 145.7 146.3
Post-retirement and other employee benefits 6.2 6.1 5.9
Provision for environmental rehabilitation 546.1 527.1 464.9
Deferred tax liability 112.0 98.6 157.4
Current liabilities 262.8 237.1 422.8
Trade and other payables 238.8 215.0 239.9
Loans and borrowings 2 24.0 22.1 30.6
Liabilities classified as held for sale 152.3
Total equity and liabilities 2 838.6 2 770.4 2 533.7
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Quarter Quarter Quarter 9 months to 9 months to
Mar 2013 Mar 2012 Dec 2012 31 Mar 2013 31 Mar 2012
Rm Rm Rm Rm Rm
Unaudited Unaudited Unaudited Unaudited Unaudited
Balance at the beginning of the period 1 755.2 1 439.0 1 657.6 1 633.9 1 219.2
Share capital issued (0.2) 0.3 (0.2) 1.8
for share options exercised 1.8
for costs (0.2) 0.3 (0.2)
Increase in share-based payment reserve 0.3 0.8 0.3 0.9 2.7
Net profit attributable to equity owners of the parent 62.1 49.9 93.0 233.7 250.6
Net profit attributable to non-controlling interest 18.8 14.5 31.0 64.5 62.0
Dividends paid on ordinary share capital (53.1) 0.6 (91.0) (28.9)
Dividends paid to non-controlling interest (8.1) (7.6) (15.7)
Treasury shares acquired (22.9) (22.9)
Fair value adjustment on available-for-sale investments (10.6) 3.6 (43.3)
Share Option Scheme buy-out (24.1) (24.1)
Other comprehensive income 1.4 1.4 0.5 7.1 (1.8)
Balance as at the end of the period 1 765.8 1 482.7 1 755.2 1 765.8 1 482.7
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Quarter Quarter Quarter 9 months to 9 months to
Mar 2013 Mar 2012 Dec 2012 31 Mar 2013 31 Mar 2012
Rm Rm Rm Rm Rm
Unaudited Unaudited Unaudited Unaudited Unaudited
Net cash inflow from operations 179.7 141.5 212.5 424.8 503.3
Net cash outflow from investing activities (108.0) (67.8) (126.5) (319.8) (240.1)
Net cash (out)/inflow from financing activities (59.8) (23.1) (97.5) 6.8 (142.5)
Loans and other (1.0) (0.2) (53.8) 109.9 (73.5)
Treasury shares acquired (22.9) (22.9)
Dividends paid to owners of the parent (52.5) (37.9) (91.0) (28.9)
Dividends paid to non-controlling interest holders (6.3) (5.8) (12.1) (17.2)
Increase/(decrease) in cash and cash equivalents 11.9 50.6 (11.5) 111.8 120.7
Opening cash and cash equivalents 398.4 329.2 409.9 298.5 259.1
Closing cash and cash equivalents 410.3 379.8 398.4 410.3 379.8
Reconciliation of net cash inflow from operations
Profit before taxation 93.3 77.0 143.0 346.4 270.9
Profit from discontinued operations 6.9 136.0
93.3 83.9 143.0 346.4 406.9
Adjusted for:
Movement in gold in process 3.3 7.0 (3.4) 12.9 20.4
Depreciation and impairment 34.7 33.4 33.9 102.8 92.9
Movement in provision for environmental rehabilitation 19.1 10.8 16.2 45.3 22.7
Share-based payments 1.4 0.8 1.6 3.3 2.7
Loss on financial liabilities measured at amortised cost 7.1
Profit on disposal of assets (8.6) (0.1) (11.2)
Finance expense and unwinding of provisions 0.2 2.3 0.3 1.6 7.9
Growth in Environmental Trust Funds (1.4) (1.9) (1.3) (4.2) (5.5)
Other non-cash items (2.2) 0.1 (4.0) (7.5) (2.8)
Taxation paid (1.7) 3.0 10.0 (10.2)
Working capital changes 39.9 6.8 23.3 (74.6) (38.8)
Net cash inflow from operations 179.7 141.5 212.5 424.8 503.3
Notes to the financial statements
1. Cash and cash equivalents
Included in cash and cash equivalents is restricted cash of R69.5 million.
2. Loans and borrowings
Included in loans and borrowings is a Domestic Medium Term Note Programme ("DMTN Programme") under which DRDGOLD can issue notes from
time to time. DRDGOLD raised a total of R165 million under the DMTN Programme in July and September 2012. The different unsecured notes issued
mature 12 (R20.0 million), 24 (R69.5 million) and 36 (R75.5 million) months from the date of issue and bear interest at the three month Johannesburg
Inter-bank Acceptance Rate (JIBAR) rate (currently 5.125%) plus margin ranging from 4% to 5% per annum.
KEY OPERATING AND FINANCIAL RESULTS (Unaudited)
Ore milled (t000) (metric) (imperial) Mar 2013 Qtr 5 766 6 356
Dec 2012 Qtr 6 066 6 687
Mar 2013 Ytd 17 430 19 213
Yield (g/t) (oz/t) (metric) (imperial) Mar 2013 Qtr 0.194 0.006
Dec 2012 Qtr 0.200 0.006
Mar 2013 Ytd 0.198 0.006
Gold produced (kg) (oz) (metric) (imperial) Mar 2013 Qtr 1 119 35 976
Dec 2012 Qtr 1 214 39 031
Mar 2013 Ytd 3 447 110 822
Cash operating costs (ZAR/kg) (US$/oz) Mar 2013 Qtr 319 065 1 111
Dec 2012 Qtr 284 425 1 017
Mar 2013 Ytd 302 405 1 091
Notional cash expenditure (ZAR/kg)(US$/oz) Mar 2013 Qtr 408 272 1 423
Dec 2012 Qtr 369 632 1 323
Mar 2013 Ytd 384 475 1 387
Cash operating costs (ZAR/t) (US$/t) Mar 2013 Qtr 62 6
Dec 2012 Qtr 57 6
Mar 2013 Ytd 60 6
Gold and Silver revenue (ZAR million) (US$ million) Mar 2013 Qtr 531.0 59.3
Dec 2012 Qtr 580.6 66.8
Mar 2013 Ytd 1 638.4 190.0
Operating profit (ZAR million) (US$ million) Mar 2013 Qtr 170.7 18.9
Dec 2012 Qtr 238.7 27.6
Mar 2013 Ytd 583.1 67.6
Capital expenditure (ZAR million) (US$ million) Mar 2013 Qtr 99.8 11.2
Dec 2012 Qtr 103.5 11.9
Mar 2013 Ytd 282.9 32.8
CASH OPERATING COSTS RECONCILIATION
R million unless otherwise stated
Total cash costs Mar 2013 Qtr 405.8
Dec 2012 Qtr 393.2
Mar 2013 Ytd 1 204.9
Movement in gold in process Mar 2013 Qtr (3.3)
Dec 2012 Qtr 3.4
Mar 2013 Ytd (12.9)
Less: Assessment rates, rehabilitation and other Mar 2013 Qtr 22.5
Dec 2012 Qtr 22.5
Mar 2013 Ytd 78.6
Less: Retrenchment costs Mar 2013 Qtr
Dec 2012 Qtr 0.6
Mar 2013 Ytd 0.6
Less: Corporate and general administration costs Mar 2013 Qtr 23.0
Dec 2012 Qtr 28.2
Mar 2013 Ytd 70.4
Cash operating costs Mar 2013 Qtr 357.0
Dec 2012 Qtr 345.3
Mar 2013 Ytd 1 042.4
Capital expenditure Mar 2013 Qtr 99.8
Dec 2012 Qtr 103.5
Mar 2013 Ytd 282.9
Notional cash expenditure (NCE) Mar 2013 Qtr 456.8
Dec 2012 Qtr 448.7
Mar 2013 Ytd 1 325.3
Gold produced (kg) Mar 2013 Qtr 1 119
Dec 2012 Qtr 1 214
Mar 2013 Ytd 3 447
Total cash operating costs (R/kg) Mar 2013 Qtr 319 065
Dec 2012 Qtr 284 425
Mar 2013 Ytd 302 405
Total cash operating costs (US$/oz) Mar 2013 Qtr 1 111
Dec 2012 Qtr 1 017
Mar 2013 Ytd 1 091
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 2012, which we filed
with the United States Securities and Exchange Commission on 26 October 2012 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 statements included in this report have not been reviewed and reported on by
DRDGOLD's auditors.
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 NIEL 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: 25/04/2013 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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