17% increase in operating profit; gold production 4% higher
11 February 2014
New flotation/fine-grind circuit completed
Johannesburg, South Africa. 11 February 2014. DRDGOLD Limited (DRDGOLD; JSE, NYSE: DRD) reported a quarter on quarter increase of 17% in operating profit to R84.1 million for the quarter ended 31 December 2013, reflecting a 4% rise in gold production to 35 043oz and a 14% drop in all-in sustaining costs to R375 246/kg.
Operating margin improved from 13% to 20%, and the all-in sustaining costs margin from -2% to 9%. Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 68% to R46.3 million. Headline earnings were R0.9 million (0 SA cents) compared with the previous quarter’s headline loss of R12.5 million (3 SA cents).
The average Rand gold price received was 3% lower at R413 359/kg.
CEO Niël Pretorius says the new flotation/fine-grind (FFG) circuit at Ergo’s Brakpan Plant was completed during the quarter under review but took longer to build – and cost more – than planned.
This was due largely to a need, identified during commissioning, to bring online a third thickener to maintain adequate float volume throughput.
Looking ahead, Pretorius says that – due to lower than planned gold production in FY2014 resulting from the late commissioning of the FFG circuit and because “easing into steady state is only happening now” – the company’s approach to costs and capital expenditure will remain conservative in order to maintain an adequate cash buffer.
“By and large, the measures required to achieve steady state are operational and within our control, and steady state will continue to be our main priority,” Pretorius says.
- Report to shareholders for the quarter ended 31 December 2013 (PDF - 820KB)
- Presentation: will be available at 10:30am
- Webcast: Results presentation
South Africa & North America
James Duncan, Russell and Associates
+27 11 880 3924 (office)
+27 (0) 79 336 4010 (mobile)
Investor and Media Relations
Phil Dexter, St James’s Corporate Services
+44 (0) 20 7796 8644 (office)
+44 (0) 779 863 4398 (mobile)
For more information, please visit www.drdgold.com
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 2013, which we filed with the United States Securities and Exchange Commission on 25 October 2013 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.