HomeGoldDRDGOLD earnings and profit well up

DRDGOLD earnings and profit well up

Underground station at
-east vertical shaft
Johannesburg, South Africa — MININGREVIEW.COM — 22 August 2008 – DRDGOLD Limited – South Africa’s fourth-largest gold producer with both operations and exploration activities – achieved a significant boost in full year earnings for the year ended 30 June 2008, despite a drop in production.

Releasing the company’s 2008 financial report here DRDGOLD CEO John Sayers said annual earnings had been driven partly by re-organisation of the company’s operations to improve gold output, as well as strong support by a higher gold price.

Group revenue from continuing operations for the year was 20% higher at R1 843.9 million, reflecting a 29% increase in the average gold price received to R192 143/kg. After accounting for cash operating costs – 14% higher at R1 479.6 million – cash operating profit was 57% higher at R364.3 million. Net profit was R1 225.1 million, compared with the previous year’s loss of R1 165.0 million, reflecting profit of R1 169.2 million from the disposal of the company’s Australasian interests.

DRDGOLD said full-year adjusted headline earnings per share had risen to 64.9 cents in the year to 30June 2008, versus 3.8 cents last year. Headline EPS is the main gauge of profit in South Africa, and excludes non-trading, capital and certain one-off items.

The company – which now mines only in South Africa after selling its overseas assets – said gold output for the year had fallen 33% to 321 432 ounces, partly as a result of the mines sold in Australasia, and efforts to improve its other assets.

Reuters reports that a 1% uptick in production in the fourth quarter to 71 211 ounces on better performance at two of its three mines – Blyvoor and Crown – gave the firm hope that DRDGOLD could push for 400 000 ounces a year, but did not give an exact timeframe.

The financial report also revealed that attributable gold reserves had risen by 25% to 7.9 million ounces, while mineral resources had edged up to 54.7 million ounces in 2008 from 54.2 million ounces in 2007.

“From being an embattled gold miner trying unsuccessfully to make the best of a suite of mismatched assets in two vastly different geographic regions of the world, we have returned pretty much to our roots,” Sayers concluded. “We are once again a distinctly South African gold miner doing what we do best.”

He also announced that when his contract expired at the end of the year, he would be replaced as CEO by Niel Pretorius – managing director of the company’s South African operations.