Ergo delivers: increase of 53% in operating profit, 259% in HEPS
28 August 2012
Dividend for year of 10 SA cents declared
Johannesburg, South Africa. 28 August 2012. DRDGOLD Limited (DRDGOLD; JSE, NYSE: DRD) has reported a 53% increase in operating profit to R622.2 million from its continuing Ergo operation for the year to 30 June 2012, leading to a 259% increase in headline earnings per share (HEPS) from continuing operations to 61 South African (SA) cents.
Net cash flow from operations rose by 91% to R619.5 million.
The company has declared a dividend of 10 SA cents for the year its fifth successive annual dividend declaration.
Reflecting on activities during the year, DRDGOLD CEO Nil Pretorius says the company was pleased to complete Part A of the disposal of its 74%held interest in Blyvoorutizicht Gold Mining Company Limited (Blyvoor) to Village Main Reef Limited (Village), resulting in DRDGOLD acquiring an interest in Village of just under 9%.
Also during the year, completion of the R350 million Ergo plant upgrade to a volume capacity of 1.8Mtpm and of the Crown/Ergo pipeline facilitated full consolidation of the Ergo surface retreatment footprint.
Pretorius says he is ‘encouraged' by Ergo's production for the year of 135 708oz 3% short of the lower end of the operation's steadystate annual target given that this was achieved amid several changes. These included the decommissioning of two plants, the phasing in of two new reclamation sites and the phasing out of two depleted sites, one of which was the very lucrative Top Star dump.
Looking ahead, Pretorius says that to deliver into its targets the company must maintain tonnage volumes to plant and ensure that Ergo's new flotation/finegrind circuit is operational before the end of the current financial year.
He adds that research and development will continue, in order to further enhance metallurgical efficiency.
On the sustainable development front, he says, there are a growing number of initiatives that are becoming strategically significant. These include "intelligent and innovative" use of water and deployment of "manufactured capital" to reduce the company's carbon footprint.
The company's business development academy, EBDA, had made a "stepchange from a quasicharitable and mechanical compliance institution "to one that develops real human and social capital".
Pretorius says "an exciting new course" could emerge for the company by its leveraging its tailings retreatment expertise to consider expansion into "other areas of reclamation and recovery".
South Africa & North America
James Duncan, Russell and Associates
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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 forwardlooking 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 20F. You should not place undue reliance on these forwardlooking statements, which speak only as of the date thereof. We do not undertake any obligation to publicly update or revise these forwardlooking statements to reflect events or circumstances after the date of this report or to the occurrence of unanticipated events. Any forwardlooking statement included in this report have not been reviewed and reported on by DRDGOLD's auditors.