Results for the year ended 30 June 2012 - DRDGOLD€¦ · Financial review: income statement for...

Results for the year ended30 June 2012

Niël Pretorius, CEOCraig Barnes, CFOJohannesburg28 August 2012

Disclaimer

Many factors could cause the actual results, performance or achievements to be materially different from any futureresults, 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 thegold price, a sustained strengthening of the Rand against the Dollar, regulatory developments adverse to DRDGOLDor difficulties in maintaining necessary licenses or other governmental approvals, changes in DRDGOLD’s competitiveposition, changes in business strategy, any major disruption in production at key facilities or adverse changes inforeign exchange rates and various other factors. These risks include, without limitation, those described in the sectionentitled “Risk Factors” included in our annual report for the fiscal year ended 30 June 2011, which we filed with theUnited States Securities and Exchange Commission on 28 October 2011 on Form 20-F. You should not place unduereliance on these forward-looking statements, which speak only as of the date thereof. We do not undertake anyobligation to publicly update or revise these forward-looking statements to reflect events or circumstances after thedate of this report or to the occurrence of unanticipated events. Any forward-looking statement included in this reporthave not been reviewed and reported on by DRDGOLD’s auditors.

228 August 2012Results for the year ended 30 June 2012

Key features for the year (FY12 v FY11)

33% increase in dividend to 10 SA cents per ordinary share53% increase in operating profit from continuing operations to R622.2 million259% increase in HEPS to 61 SA cents91% increase in net cash flow from operations to R619.5 millionErgo’s flotation/fine-grind project on track for completion February 2013Restructuring of surface retreatment operations completed Blyvoor disposal completed

28 August 2012Results for the year ended 30 June 2012 3

Ergo: trends


-

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

Crown City Knights Ergo

Tons

(000

's)

Actual 2011 Actual 2012 Target 2013

Tons comparison – annual


• Top Star depleted

• 3A2 (JCC dump) commissioned

• City Deep to Elsburg pipeline completed September 2011

• City Deep production from 3L42 starts ramping up

• 9.46Mt @ 0.377g/t

• Final completion of Crown/ERGO pipeline early in calendar 2012

Gold comparison – annual


-

200

400

600

800

1 000

1 200

1 400

1 600

1 800

Crown City Knights Ergo

Kilo

gram

s

Actual 2011 Actual 2012 Target 2013

• 3A2 replaces Top Star

• 11.1Mt @ 0.504g/t

• 5 582kg contained

• Final clean-up phase

• Output further supported by volume increase

• Volume increase• Impact of

flotation/fine-grind circuit in final quarter

Group trends


Operating margin (%)

Operating margin up to 35%


29%

35% 34%

40%

37%

28%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

FY2011 FY2012 Q1 2012 Q2 2012 Q3 2012 Q4 2012

EBITDA (Rm)

EBITDA from continuing operations up 63% to R346.9 million


212.2

346.9

113.0

141.0

105.6

-12.7-50

0

50

100

150

200

250

300

350

400

FY2011 FY2012 Q1 2012 Q2 2012 Q3 2012 Q4 2012

Headline earnings per share (SA cents)

Headline earnings per share from continuing operations up 259% to 61 SA cents


17

61

1215

12

22

0

10

20

30

40

50

60

70

FY2011 FY2012 Q1 2012 Q2 2012 Q3 2012 Q4 2012

Free cash flow (Rm)

Increase in free cash flow from continuing operations to R207.9 million


-11.2

207.9

34.8

154.7

73.7

-55.3

-100

-50

0

50

100

150

200

250

FY2011 FY2012 Q1 2012 Q2 2012 Q3 2012 Q4 2012

Financial review: income statement for the year ended 30 June 2012


FY2012 FY2011 CommentsRm Rm

Continuing operationsRevenue 1 764.2 1 379.5 Up 28%, higher gold price

Net operating costs (1 142.0) (972.5) Up 17%, higher volumes, electricity and wage increases

Operating profit 622.2 407.0 Up 53%, operating margin increased to 35%

Depreciation (119.2) (98.3) Up 21%, new infrastructure being depreciated

Movement in provision for environmental rehab (59.5) (47.0) Up 27%, new infrastructure and larger footprint

Environmental rehab costs (47.3) (37.2) Up 27%, Crown tailings complex decommissioned

Other income and costs (151.0) (121.9) Up 24%, loss on sale of assets, care and maintenance

Net finance income 15.8 10.6 Up 49%

Profit before tax 261.0 113.2 Up 131%

Taxation (8.0) (29.7) Deferred tax credit

Profit after tax 253.0 83.5 Up 203%

Discontinued operation 124.0 (498.9) Blyvoor profit for 11 months and loss on disposal

Net profit/(loss) 377.0 (415.4)

HEPS from continuing operations (cents) 61 17 Up 258%

HEPS from total operations (cents) 86 28 Up 207%

Financial review: balance sheet at 30 June 2012


30 Jun 2012 30 Jun 2011 CommentsRm Rm

Property, plant and equipment 1 641.6 1 550.1

Non-current investments and other assets 176.1 25.1 Village shares R151.3m

Environmental rehabilitation trust funds and guarantees 165.6 134.2 Funding of rehab guarantees

Deferred tax asset 38.3 69.2

Cash and cash equivalents 298.5 259.1 Strong cash position

Other current assets 172.1 250.9

Total assets 2 492.2 2 288.6

Equity 1 633.9 1 219.2

Long-term liabilities 6.0 46.7 No long-term loans and borrowings

Provision for environmental rehabilitation 504.3 490.2

Deferred tax liability 87.0 122.5

Current liabilities 261.0 410.0 Current loans and borrowings of R30.7m

Total equity and liabilities 2 492.2 2 288.6

Current ratio 1.8 1.2 Improved liquidity

Progress to date

Orders placed for all major equipment and refurbishingEquipment deliveries on scheduleExtensive build up in on site activity over the next three monthsProject currently on schedule and budget


Activity Feb2012

Mar2012

Apr2012

May2012

Jun2012

Jul2012

Aug2012

Sep2012

Oct2012

Nov2012

Dec2012

Jan2013

Feb2013

Mar2013

Apr2013

May2013

Jun2013

Jul2013

Aug2013

Project approval

Strip and clear redundant plant

Order/delivery of new plant

Refurbish existing plant

Shipping of mills from Canada

Install equipment

Plant commissioning

Tonnage build-up

Full tonnage

100%95%

75%40%

0%30%

0%0%

Completed

Shows % complete

0%

Date Action Effect

1 February 2012 Working capital adjustment (cash flow cut-off) • No further funds repaid by Blyvoor to DRDGOLD

• No further funding to Blyvoor from DRDGOLD

• Blyvoor working capital adjusted to Rnil

1 June 2012 Part A closed (disposal of DRDGOLD loans to Blyvoor and transfer of control)

All conditions precedent were either met or waived

• Blyvoor consolidated by DRDGOLD until 31 May 2012

• DRDGOLD accounted for Blyvoor disposal 1 June 2012

• Control transfers to Village Main Reef (VMR) ito IFRS

• DRDGOLD received 85 714 286 VMR shares; 20 000 000 held in Escrow until Park B closes

By 11 February 2014

By 11 February 2015

Part B closing (disposal of DRDGOLD ordinary shares in Blyvoor)

Conditions precedent:

• Blyvoor mining right converted to New Order by first date

• share sale consent by Minister by second date

• 20 000 000 VMR shares held in Escrow released to DRDGOLD

Blyvoor countdown


Zimbabwe updated (CHIZIMGOLD JV)

Focus-based exploration drilling planned for FY2013Four areas of focus will be:• Leny & Ascot• John Bull• alluvial deposits• KT


Sustainable development


Financial capital

Salaries, wages, other benefits paid to employees: R821 million (59% of total expenditure) R22 million paid to government in taxes, royaltiesTotal expenditure on goods, services: R1 637 millionRe-investment through share repurchases: R58 millionDividends paid to shareholders: R46 millionTotal value distribution: R1 400 million


Intellectual and manufactured capital

Improving recoveries:• flotation/fine grind process • second CIL circuit at Ergo refurbished

Increasing deposition capacity at Brakpan tailings facility (BTF)Creating synergies: Crown/Ergo pipeline


Human capital

2 222 people currently employed (792 permanent employees and 1 430 contractors)35.5% HDSAs in managementNo industrial action No DMR safety stoppages R3.9 million spent on employee training, development


Natural capital

Mega water consumer: 30Ml/pm

• focus on recycling, storing

• further innovations pending

Carbon footprint: pipeline design delivers 25% electricity cost reduction

R116.1 million spent on dump rehabilitation

• 8.6ha of slide slopes, 20ha of top surfaces vegetated during FY2012

• 22ha of dust netting installed

Total net closure provision: R447 million


Social capital

Corporate social investment: R16 millionSocio-economic development projects: R9.4 million Life after employment initiatives implemented (Vuselela and Best Life)Flagship Ekurhuleni Business Development Academy (EBDA): 5 432 people trained


Looking ahead

Deliver into targets• maintain tonnage volumes to plant• complete flotation/fine-grind circuit before financial year-end

Continue R&D• improve recoveries

Progress strategic sustainable development initiatives• intelligent water consumption• reduced carbon footprint• real human, social capital (EBDA)

Explore expansion into other reclamation/recovery areas


Registered office 1st Floor, Quadrum 1Quadrum Office Park50 Constantia BoulevardConstantia Kloof Ext 28RoodepoortSouth Africa

PO Box 390 Maraisburg 1700 South Africa

Contact details Tel: +27 (0) 11 470 2600 Fax: +27 (0) 11 470 2618 Email: [email protected]

[email protected] Website: www.drdgold.com

Shareholder data (Incorporated in the Republic of South Africa) Registration No.1895/000926/06 JSE share code: DRDISIN: ZAE 000058723 Issuer code: DUSM NYSE trading symbol: DRD

Results for the year ended 30 June 2012 - DRDGOLD€¦ · Financial review: income statement for...

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