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Trading statement and operational update for the year ended 30 June 2019
DRDGOLD LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1895/000926/06)
ISIN: ZAE000058723
JSE share code: DRD
NYSE trading symbol: DRD
(“DRDGOLD” or the “Company”)
TRADING STATEMENT AND OPERATIONAL UPDATE FOR THE YEAR ENDED 30 JUNE 2019
In terms of paragraph 3.4(b) of the JSE Limited Listings Requirements, companies are required to
publish a trading statement as soon as they are satisfied, with a reasonable degree of certainty,
that the financial results for the current reporting period will differ by at least 20% from the
financial results of the previous corresponding period.
DRDGOLD is in the process of finalising its results for the year ended 30 June 2019 (“Results”)
and shareholders are accordingly advised that the Company has reasonable certainty that it will
report:
- earnings per share of between 11.65 cents and 11.95 cents per share compared to earnings
of 1.5 cents per share for the previous corresponding period; and
- headline earnings per share of between 10.73 cents and 11.07 cents per share compared to
headline earnings of 1.7 cents per share for the previous corresponding period.
The expected increase in earnings per share and headline earnings per share for the year ended
30 June 2019 compared to the previous corresponding period are due mainly to movements in
the following items:
1. Revenue
Revenue increased by R271.7 million, or 11% to R2,762.1 million (2018: R2,490.4 million).
- Ergo’s R2,577.5 million contribution to revenue was 3% higher than the previous
corresponding period due to the higher average Rand gold price received moderating the
impact of 4% lower gold sold; and
- Far West Gold Recoveries (“FWGR”) made its maiden contribution to revenue of R184.6
million, the majority of it from 1 April 2019 when commercial production commenced.
2. Cost of sales
The increase in revenue was moderated by an increase in cost of sales of R206.2 million, or 9%,
to R2,553.9 million (2018: R2,347.7 million). This included:
- An increase in operating costs of R255.9 million (R112.7 million related to the first year of
operations at FWGR and, the remainder is due mostly to inflationary cost increases at Ergo);
and
- A credit of R60.0 million (2018: R2.9 million) resulting from a change in estimated
environmental rehabilitation, related mostly to Ergo.
3. Weighted average number of ordinary shares
Earnings and headline earnings per share increased notwithstanding the issuance of 265 million
consideration shares to Sibanye Gold Limited trading as Sibanye-Stillwater, on 31 July 2018 in
respect of the FWGR acquisition.
Year ended 30 Jun 2019 Year ended
30 Jun 2018
Corporate
office and
other
reconciling
Ergo FWGR items Total Total
All amounts presented in R million unless otherwise indicated Rm Rm Rm Rm Rm
Revenue 2,577.5 184.6 - 2,762.1 2,490.4
Cost of sales (2,437.3) (143.1) 26.5 (2,553.9) (2,347.7)
Operating (costs)/income (2,351.5) (112.7) 25.7 (2,438.5) (2,182.6)
Depreciation (142.8) (25.7) (0.6) (169.1) (168.0)
Change in estimate of environmental rehabilitation
recognised in profit or loss 58.6 - 1.4 60.0 2.9
Retrenchment costs (1.6) (4.7) - (6.3) -
Gross profit from operating activities 140.2 41.5 26.5 208.2 142.7
Other income 2.2 - 5.7 7.9 -
Administration expenses and other costs (12.0) (2.3) (76.6) (90.9) (90.7)
Administration expenses and other costs excluding the
increase in Long-Term Incentive liability - - (69.5) (69.5) (73.5)
Increase in Long-Term Incentive liability (12.0) (2.3) (7.1) (21.4) (17.2)
Results from operating activities 130.4 39.2 (44.4) 125.2 52.0
Finance income 20.8 22.5 15.0 58.3 38.8
Finance expense (54.3) (19.6) (4.5) (78.4) (58.4)
Profit before tax 96.9 42.1 (33.9) 105.1 32.4
Income tax (14.6) (13.4) 1.4 (26.6) (25.9)
Profit for the year 82.3 28.7 (32.5) 78.5 6.5
OPERATIONAL PERFORMANCE
Ore milled (000’t) 23,162 1,277 - 24,439 24,281
Yield (g/t) 0.194 0.261 - 0.197 0.193
Gold produced (kg) 4,493 333 - 4,826 4,679
Gold sold (kg) 4,478 305 - 4,783 4,653
Cash operating costs
(R/t) 100 88 - 99 88
(US$/t) 7 6 - 7 6
Cash operating costs
(R/kg) 512,439 313,443 - 499,749 458,866
(US$/oz) 1,124 688 - 1,096 1,118
All-in sustaining costs*
(R/kg) 521,929 450,820 - 524,713 505,622
(US$/oz) 1,145 989 - 1,151 1,258
All-in cost*
(R/kg) 527,646 1,533,443 - 600,941 524,651
(US$/oz) 1,195 3,472 - 1,361 1,298
Sustaining capital expenditure (15.4) (6.9) (0.2) (22.5) (81.3)
Non-sustaining capital expenditure (7.4) (323.8) - (331.2) (44.7)
Reconciliation of adjusted EBITDA
Results from operating activities 125.2 52.0
Depreciation 169.1 168.0
Increase in Long-Term Incentive liability 21.4 17.2
Change in estimate of environmental rehabilitation recognised
in profit or loss (60.0) (2.9)
Gain on financial instruments (2.1) -
(Gain)/loss on disposal of property, plant and equipment (5.8) 0.6
Retrenchment costs 6.3 -
Transaction costs - 9.0
Adjusted EBITDA ** 254.1 243.9
Rounding of figures may result in computational discrepancies
* All-in cost definitions based on the guidance note on non-GAAP Metrics issued by the World Gold Council on 27 June
2013
** The adjusted earnings before interest, taxes, depreciation and amortisation ("EBITDA") is based on the definitions in
DRDGOLD´s revolving credit facility agreements. Adjusted EBITDA is not an IFRS measure and is provided for illustrative
purposes only and because of its nature, it may not fairly present the Company´s results of operations
FWGR’s revenue and cost of sales were lower than the forecasted revenue and cost of sales for
the six months ended 30 June 2019 included in the circular to shareholders, dated 26 February
2018, due primarily to the date of commencement of commercial production for most Phase 1
assets of 1 April 2019 being three months later than the forecasted date of 1 January 2019 as a
result of the effective date of the transaction being three months later than anticipated. All-in
sustaining costs per kg were disproportionately impacted by including the unwinding of the
environmental rehabilitation provision for 11 months while including gold production/sold mostly
for the fourth quarter.
Cash and cash equivalents and borrowings
DRDGOLD ended the financial year with cash and cash equivalents of R279.5 million (2018:
R302.1 million) and borrowings of Rnil after R192 million was raised and repaid on the revolving
credit facility during the year.
The information contained in this announcement does not constitute an earnings forecast. The
financial information provided is the responsibility of the directors of DRDGOLD, and such
information has not been reviewed or reported on by the Company’s auditors.
Johannesburg
27 August 2019
Sponsor
One Capital
Date: 27/08/2019 08:00:00
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