| Tue 10 Aug 2004, 8:33 | | REPORT FOR THE QUARTER ENDED 30 JUNE 2004 |
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DURBAN ROODEPOORT DEEP, LIMITED - REPORT TO SHAREHOLDERS FOR THE 4th QUARTER
ENDED 30 JUNE 2004 OF THE 2004 FINANCIAL YEAR
DURBAN ROODEPOORT DEEP, LIMITED
(Incorporated in the Republic of South Africa)
Registration No.1895/000926/06
ARBN: 086 277616
JSE trading symbol: DUR
ISIN Code: ZAE 000015079
Issuer code: DUSM
NASDAQ trading symbol: DROOY
(`DRD`)
REPORT TO SHAREHOLDERS FOR THE 4th QUARTER ENDED 30 JUNE 2004
OF THE 2004 FINANCIAL YEAR
Group Results
KEY FEATURES
US$40 per ounce cash margin
45.33% ownership of Emperor
Australasian operations - 70 000 ounces @ US$200 per ounce
Ore reserves confirmed at 11.7 million ounces
Year-end impairment of mining assets and investments - US$15.3 million
Quarter Quarter 12 months to
Jun 2004 Mar 2004 Jun 2004
Gold production (attributable) oz 228 465 240 758 905 023
kg 7 106 7 488 28 149
Cash operating costs US$/oz 355 318 344
R/kg 76 031 69 329 76 209
Gold price received US$/oz 395 406 391
R/kg 85 804 88 577 86 788
Capital expenditure US$ m 4.5 5.9 23.2
R m 30.1 39.9 160.4
STOCK
ISSUED CAPITAL
233 307 667 ordinary no par value shares
5 000 000 cumulative preference shares
Total ordinary no par value shares issued and committed: 259 253 030
STOCK TRADED JSE ASX NASDAQ FRANKFURT
Avg. volume for the quarter per day (000) 83 5 2 642 86
% of issued stock traded (annualised) 9% 1% 296% 10%
Price - High R 23.00 A$ 4.55 US$ 3.58 Euro 2.82
- Low R 15.25 A$ 3.41 US$ 2.23 Euro 2.00
- Close R 15.70 A$ 3.60 US$ 2.52 Euro 2.11
ADDRESS DETAILS
REGISTERED OFFICE: SHARE TRANSFER SECRETARIES:
45 Empire Road, Parktown, Ultra Registrars (Pty) Ltd,
South Africa PO Box 4844,
PO Box 390, Johannesburg 2000,
Maraisburg 1700, South Africa
South Africa
UNITED KINGDOM SECRETARIES: DEPOSITORY BANK:
St. James`s Corporate Services Ltd, American Depository Receipts,
6 St. James`s Place, The Bank of New York,
London Shareholders Relations Department,
SW IA INP 101 Barclay Street,
New York, NY 10296
FORWARD LOOKING STATEMENTS
Some of the information in this voluntary release may contain projections or
other forward looking statements regarding future events or other future
financial performance, including statements regarding the production performance
at the South African operations, and DRD`s ability to diversify its assets and
grow outside South Africa. We wish to caution you that these forward-looking
statements are not guarantees or predictions of future performance, and involve
known or unknown risks, uncertainties and other factors, many of which are
beyond our control and which may cause actual events or results to differ
materially from those expressed in the statements contained in this release.
Factors that could cause or contribute to such differences are discussed in the
sections entitled `Risk Factors` included in our annual report on Form 20-F for
the fiscal year ended 30 June 2003, which we filed with the United States
Securities and Exchange Commission on 30 December 2003 and is available on the
SEC`s website at www.sec.gov. We undertake no obligation to publicly update or
release results of any of these projections or forward looking statements to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unexpected results.
LETTER TO SHAREHOLDERS
Dear shareholder
Our gold price received for the quarter decreased by US$11 per ounce to US$395
per ounce, which together with the continued strength of the Rand kept the Rand
gold price depressed at R85 804 per kilogram (previous quarter: R88 577 per
kilogram). Gold production decreased by 5% relative to the previous quarter due
to shaft closures and operational problems at the Blyvooruitzicht mine. The
South African operations made a cash operating loss of US$6.5 million but this
was offset by a strong performance from the Australasian operations, which
recorded a cash operating profit of US$14.5 million. Total cash operating profit
for the quarter was US$8.0 million.
Due to the financial year-end and Rand strength, we have made certain
adjustments detailed below to the carrying values of our South African
Operations that, together with increased depreciation and deferred tax
adjustments resulted in a loss before taxation and other items of US$24.9
million and a net loss applicable to stockholders of US$42.3 million for the
quarter.
South African Operations
The North West Operation has continued to stabilise following the completion of
the restructuring exercise undertaken in September 2003. The current focus is on
opening up higher-grade panels and reducing costs. Selective mining has re-
started at No 6 Shaft, but continued mining at two of the Buffels Shafts - Nos 9
and 11 Shaft - is currently under review. The clean up at the old High Grade
Gold Plant has been completed and milling is now concentrated in the South
Plant. Further upgrades to the South Plant have been planned to improve
efficiencies and further reduce operating costs.
Blyvooruitzicht continued to disappoint in the quarter. Gold production both
from the underground section and the Slimes Dam Project was well below budget.
Despite the work done by the Stakeholder Task Team established in March, there
has been no discernible improvement in either production or operating
efficiencies. Consequently, notice of a 60-day review in terms of the Labour
Relations Act was given on 28 June 2004.
The principal problem areas have been a shift from Main Reef to Carbon Leader
mining, the mining of below-pay limit panels, poor advances per blast, lower
than expected mine call factors, increased lock-up in the plant due to the
ending of surface rock dump feed to the mill, and poor recoveries from the
Slimes Dam Project.
A number of action steps have been initiated at the mine, including the
involvement of external consultants, all aimed at restoring previous production
levels, following a further poor performance in July. Deon van der Mescht,
Divisional Director: SA Operations has left the group.
Australasian Operations
Tolukuma recorded its 16th consecutive month of gold production in excess of 7
000 ounces. The focus of attention has been on near-mine exploration and
increasing reserves. Five drill rigs are now working on a number of promising
targets both underground and on surface with the result that several new veins
have been identified. At year-end, reserves have increased to 203 000 ounces.
The aim of the current drilling programme is to further increase the ore
reserves.
The Porgera Joint Venture, in which DRD has a 20% interest, continues to deliver
strong results and is the principle cash generating business unit in the group,
reporting a cash operating profit of US$11.7 million for the quarter. A new
exploration target, the Eastern Zone, has been identified and is undergoing a
drilling program at present.
DRD`s offer for Emperor Mines Limited closed on 30 July 2004. Acceptances
received have increased our shareholding to 45.33% of the company. DRD will now
support the Board of Emperor in recapitalising the company and providing
managerial back up and guidance. At Emperor`s request, three senior managers
have been seconded to the Vatukoula mine in Fiji. A new shareholder, Arduina
Holding BV, purchased 14.99% of the shares in Emperor in the open market and
have indicated their intention to increase this stake in the near future.
Shareholders` attention is drawn to the announcement by Emperor on 26 July 2004,
of its intention to raise A$12.5 million by way of a rights issue.
DRD`s attributable offshore gold production has increased to approximately 350
000 ounces a year against the stated target of 400 000 ounces.
Crown/ERPM Associate
DRD has a 40% interest in these entities, and manages and operates them on
behalf of the shareholders. Total gold production for the quarter increased by
10% to 1 960 kilograms (63 016 ounces). During the quarter, an operational
review of the ERPM underground operations was undertaken and concluded that
continued mining activity is unsustainable, even at a significantly higher Rand
gold price. Under these circumstances, the ERPM underground operations have been
placed on controlled closure between now and March 2005. Surface mining on the
Cason Dump will continue, with treatment through the Knights plant. The surface
operation is building up to the design capacity of 200 000 tonnes per month.
ERPM recorded a cash operating profit of US$1.8 million for the quarter, and the
proceeds will be used to fund further retrenchment packages, pay creditors and
the rehabilitation of this century old mine. As part of the operational review,
employee retrenchments have been announced and approximately 2 700 employees
will be affected. Retrenchment of the first 900 employees has taken place with
the support of the unions and no labour unrest.
The Crown Section surface operation produced a cash operating profit of US$1.8m
for the quarter. Following the closure of the ERPM underground section, the
surface operation will include the ERPM Cason Dump and will be the only surface
retreatment operation on the Witwatersrand. Cash operating costs during the
quarter were R70 743 per kilogram (US$334 per ounce). The Crown Section`s life
of mine remains at seven years.
Funding of US$8.8 million was advanced to ERPM during the financial year as part
of a 60:40 funding arrangement with the Industrial Development Corporation (IDC)
and DRD respectively. The funding was part of a capital expenditure programme
aimed at improving mining infrastructure and reducing operating costs. Based on
the operational review, all further funding was withdrawn by the IDC and DRD.
The balance of the loans amounting to US$12.9 million was impaired in this
quarter.
Financial (US GAAP)
A loss before taxation and other items of US$24.9 million was recorded for the
quarter, following the US$10.7 million profit in the previous quarter. The loss
included a quarter on quarter reduction in revenue of US$8.1 million due to the
lower gold price and a reduction in output from the South African Operations,
impairment charges on mining assets and investments of US$15.3 million and a
higher depreciation and amortisation charge of US$12.2 million. The Blyvoor
deferred tax asset balance of US$12.4 million has been written off resulting in
an increase in the deferred tax expense to US$12.9 million for the quarter. Net
loss applicable to stockholders was US$42.3 million for the quarter. Basic loss
per share decreased to 18.2 US cents.
Quarter on quarter, stockholders equity decreased to US$84.7 million from
US$135.7 million and the current ratio decreased to 0.78 from 1.09. During the
quarter, a further 85 000 ounces under the Eskom `gold for electricity`
contract, covering the period January 2005 to June 2005, were closed out at a
cost of US$5.7 million. A balance of 50 000 ounces, covering the period July
2005 to September 2005, remains under the contract.
Cash and cash equivalents decreased to US$22.5 million from US$47.9 million in
the previous quarter. Net cash outflow from operating activities after changes
in working capital was US$5.0 million in the current quarter compared to an
inflow of US$21.8 million in the previous quarter.
Outlook
The impact of continued Rand strength has become an industry-wide problem in
South Africa and one of national importance. Faced with this pressure, we will
continue to re-position our assets for the future. Unfortunately, this will
inevitably lead to more job losses. DRD has been fortunate to acquire relatively
low-cost overseas production (averaging US$200 per ounce this quarter), which
has enabled the South Africa mines to be restructured. However, this will not
prevent us continuing to further diversify our assets, and grow in the Pacific
region where we are now establishing critical mass.
MARK WELLESLEY-WOOD IAN MURRAY
Executive Chairman Chief Executive Officer and Chief Financial Officer
10 August 2004
Incorporating the results of all Durban Roodepoort Deep, Limited subsidiaries,
including Blyvooruitzicht Gold Mining Company Limited, Buffelsfontein Gold Mines
Limited, West Witwatersrand Gold Holdings Limited, Hartebeestfontein Gold Mine
(a division of Buffelsfontein Gold Mines Limited), Tolukuma Gold Mines Limited,
20% of the Porgera Joint Venture, and DRD Australasia on a consolidated basis.
The results of Crown Gold Recoveries (Pty) Ltd, which include the East Rand
Proprietary Mines Limited, are accounted for on the equity basis.
The financial statements below are prepared in accordance with South African
Statements of Generally Accepted Accounting Practice (SA GAAP). The accounting
policies are, in all material respects, consistent with the annual financial
statements for the year ended 30 June 2003.
KPMG`s unmodified review report on the abridged SA GAAP financial statements
contained in this voluntary announcement of annual results is available for
inspection at the company`s registered office.
GROUP INCOME STATEMENTS - SA GAAP
FINANCIAL RESULTS (R m) (R m) (R m)
Quarter Quarter 12 months to
Jun 2004 Mar 2004 Jun 2004
Unaudited Unaudited Reviewed
Gold revenue 542.5 600.0 2 181.5
Cash operating costs ( 480.8) ( 469.6) (1 915.7)
Cash operating profit 61.7 130.4 265.8
Other expenses - net ( 38.8) ( 31.6) ( 114.8)
Business development ( 1.6) ( 1.9) ( 6.1)
Care and maintenance costs ( 2.0) ( 1.6) ( 8.3)
Cash profit from operations 19.3 95.3 136.6
Retrenchment income/(costs) 0.6 ( 10.7) ( 54.9)
Investment income 9.5 8.1 40.7
Interest paid ( 2.6) ( 12.5) ( 41.7)
Net cash operating profit 26.8 80.2 80.7
Rehabilitation ( 13.9) ( 3.7) ( 23.2)
Depreciation ( 92.7) ( 50.5) ( 211.7)
(Loss)/profit on financial
instruments ( 3.6) 16.8 6.7
Movement in gold in process 1.8 20.6 6.9
(Loss)/profit before taxation (81.6) 63.4 ( 140.6)
Taxation ( 31.0) ( 15.4) ( 51.0)
Deferred taxation ( 502.9) (9.4) ( 423.3)
(Loss)/profit after taxation ( 615.5) 38.6 ( 614.9)
Exceptional items ( 117.1) 14.9 ( 101.5)
Net(loss)/profit ( 732.6) 53.5 ( 716.4)
Headline (loss)/earnings per share
-cents ( 265.1) 17.0 ( 283.9)
Basic (loss)/earnings per share
-cents ( 315.7) 23.5 ( 330.9)
Calculated on the weighted average
ordinary shares issued of : 232 058 649 227 024 097 216 509 843
Diluted headline (loss)/earnings
per share-cents ( 265.1) 11.7 ( 283.9)
Diluted basic (loss)/earnings
per share-cents ( 315.7) 17.7 ( 330.9)
RECONCILIATION OF HEADLINE EARNINGS (R million)
Net (loss)/profit per income statement( 732.6) 53.5 ( 716.4)
Add: Impairment of assets 21.4 ( 14.9) ( 1.8)
Impairment of investments 95.7 - 103.3
Headline (loss)/earnings 615.5 38.6 ( 614.9)
GROUP BALANCE SHEETS - SA GAAP
ABRIDGED (R m) (R m)
Quarter Quarter
Jun 2004 Mar 2004
Reviewed Unaudited
Employment of Capital
Net mining assets 956.1 1 041.1
Investments 92.4 167.4
Environmental Trust funds 143.3 138.7
Deferred mining and income taxes - 493.9
Other non-current assets 200.8 204.2
Current assets 366.8 526.9
Inventories 103.5 107.0
Trade and other receivables 122.4 115.5
Cash and equivalents 140.9 304.4
1 759.4 2 572.2
Capital employed
Shareholders` equity 569.9 1 331.8
Borrowings 309.0 319.9
Derivative instruments 31.8 95.4
Rehabilitation 245.4 215.9
Deferred mining and income taxes 132.4 125.9
Provisions 82.9 88.0
Current liabilities 388.0 395.3
Trade and other payables 346.7 352.6
Current portion of borrowings 41.3 42.7
1 759.4 2 572.2
CHANGES IN SHAREHOLDERS` INTEREST - SA GAAP
(R m) (R m) (R m)
Quarter Quarter 12 months to
Jun 2004 Mar 2004 Jun 2004
Unaudited Unaudited Reviewed
Shareholders` interest at the
beginning of the period 1 331.8 1 092.6 456.1
Share capital issued 19.0 220.2 883.6
- for acquisition finance and cash 20.0 217.4 882.4
- for share options exercised
and costs ( 1.0) 2.8 2.2
- for equity portion of
convertible note - - ( 1.0)
Net (loss)/profit ( 732.6) 53.5 ( 716.4)
Minority shareholders` interest 5.8 - 5.8
Currency adjustments and other ( 54.1) ( 34.5) ( 59.2)
Shareholders` interest at the end
of the period 569.9 1 331.8 569.9
GROUP CASH FLOW STATEMENTS - SA GAAP
ABRIDGED (R m) (R m) (R m)
Quarter Quarter 12 months to
Jun 2004 Mar 2003 Jun 2004
Unaudited Unaudited Reviewed
Net cash (out)/inflow from operating
activities before working
capital changes ( 67.6) 52.2 ( 59.0)
Working capital changes 16.4 95.7 117.9
Net cash outflow from
investing activities ( 51.9) ( 53.7) ( 660.8)
Net cash(out)/inflow from financing
activities ( 23.1) 69.4 477.7
(Decrease)/increase in cash &
equivalents ( 126.2) 163.6 ( 124.2)
Translation adjustment ( 37.3) ( 4.6) ( 66.7)
Opening cash and equivalents 304.4 145.4 331.8
Closing cash and equivalents 140.9 304.4 140.9
Incorporating the results of all Durban Roodepoort Deep, Limited subsidiaries,
including Blyvooruitzicht Gold Mining Company Limited, Buffelsfontein Gold Mines
Limited, West Witwatersrand Gold Holdings Limited, Hartebeestfontein Gold Mine
(a division of Buffelsfontein Gold Mines Limited), Tolukuma Gold Mines Limited,
20% of the Porgera Joint Venture, and DRD Australasia on a consolidated basis.
The results of Crown Gold Recoveries (Pty) Ltd, which include the East Rand
Proprietary Mines Limited, are accounted for on the equity basis.
The financial statements below are prepared in accordance to Generally Accepted
Accounting Principles in the United States of America (US GAAP). The accounting
policies are, in all material respects, consistent with the annual financial
statements for the year ended 30 June 2003.
GROUP INCOME STATEMENTS - US GAAP
FINANCIAL RESULTS (R m) (R m) (R m)
(Unaudited) Quarter Quarter 12 months to
Jun 2004 Mar 2004 Jun 2004
Revenues
Product sales (Gold revenue) 542.5 600.0 2 181.5
Cost and expenses ( 503.8) ( 470.7) (1 986.5)
Production costs ( 491.7) ( 487.6) (1 970.2)
Movement in gold in process 1.8 20.6 6.9
Movement in rehabilitation
provision ( 13.9) ( 3.7) ( 23.2)
Other operating expenses
Depreciation and amortisation ( 78.4) ( 24.9) ( 215.0)
Impairment of mining assets
and investments (105.4) ( 8.3) ( 113.0)
Employment termination costs 0.6 ( 10.7) ( 54.9)
Management and consulting fees ( 7.0) ( 3.1) ( 16.9)
Profit on financial
instruments 5.8 19.2 5.5
Administration and general
charges ( 29.7) ( 21.9) ( 89.6)
Stock based compensation
costs ( 4.1) ( 4.2) ( 15.9)
Administration and general
charges ( 25.6) ( 17.7) ( 73.7)
Net operating(loss)/income ( 175.4) 79.6 ( 288.9)
Non-operating income
Interest and dividends 9.5 8.1 40.7
Other income 0.6 3.1 13.3
Finance cost
Interest income/(expense) 6.7 ( 19.0) ( 51.6)
(Loss)/profit before taxation
and other items ( 158.6) 71.8 ( 286.5)
Income and mining tax expense ( 31.0) ( 15.4) ( 51.0)
Deferred taxation
(expense)/benefit ( 90.9) 8.3 ( 47.5)
Net(loss)/profit applicable to
stockholders ( 280.5) 64.7 ( 385.0)
Basic(loss)/profit per share
(cents) ( 120.9) 28.5 ( 177.8)
Diluted(loss)/profit per share
(cents) ( 120.9) 22.3 ( 177.8)
US/SA GAAP RECONCILIATION
(Unaudited) (R m) (R m) (R m)
Quarter Quarter 12 months to
Jun 2004 Mar 2004 Jun 2004
Net (loss)/profit determined under
US GAAP ( 280.5) 64.7 ( 385.0)
Adjusted for:
Financial instruments ( 15.7) ( 0.5) ( 16.5)
Depreciation of mineral
rights and assets ( 27.0) ( 2.8) 12.7
Accounting for business
combinations 0.9 0.3 1.9
Stock based compensation
costs 4.1 4.2 15.9
Fair value adjustment
on investments ( 2.4) 5.3 30.4
Deferred taxation ( 412.0) ( 17.7) ( 375.8)
Effect of US GAAP adjustments ( 452.1) ( 11.2) ( 331.4)
Net (loss)/profit determined
under SA GAAP ( 732.6) 53.5 ( 716.4)
GROUP CASH FLOW STATEMENTS - US GAAP
ABRIDGED (R m) (R m) (R m)
(Unaudited) Quarter Quarter 12 months to
Jun 2004 Mar 2004 Jun 2004
Net cash (out)/inflow
from operating activities ( 62.0) 52.2 ( 53.4)
Working capital changes 34.0 95.7 135.5
Net cash (used in)
investing activities ( 57.5) ( 53.7) ( 666.4)
Net cash (out)/inflow from
financing activities ( 40.7) 69.4 460.1
Net (decrease)/increase in
cash & equivalents ( 126.2) 163.6 ( 124.2)
Effect of exchange rate
changes on cash ( 37.3) 4.6 ( 66.7)
Cash and equivalents at
beginning of period 304.4 145.4 331.8
Cash and equivalents at end
of period 140.9 304.4 140.9
GROUP BALANCE SHEETS - US GAAP
ABRIDGED (R m) (R m)
(Unaudited) Quarter Quarter
Jun 2004 Mar 2004
ASSETS
Current assets 366.8 526.9
Cash and cash equivalents 140.9 304.4
Receivables 122.4 115.5
Inventories 103.5 107.0
Mining assets 984.8 1 067.0
Cost 3 028.5 3 050.8
Accumulated depreciation & amortisation (2 043.7) (1 983.8)
Non-current assets 436.6 510.3
Total assets 1 788.2 2 104.2
LIABILITIES & STOCKHOLDERS` EQUITY
Current liabilities 470.9 483.3
Bank overdraft 11.5 36.2
Accounts payable and accrued liabilities 418.3 404.4
Short-term portion of long-term loans 41.1 42.7
Long-term loans 16.9 20.0
Convertible loan note 358.7 383.9
Derivative instruments 31.8 95.4
Deferred income and mining tax 132.8 44.1
Provision for environmental rehabilitation 245.4 215.9
Stockholders` equity 531.7 861.6
Authorised
300 000 000 ordinary no par value shares
5 000 000 cumulative preference shares
Issued
233 307 667 ordinary no par value shares
5 000 000 cumulative preference shares
Stated capital and share premium 3 085.5 3 066.5
Additional paid in capital 102.6 98.5
Cumulative preference shares 0.5 0.5
Minority stockholders` interest 5.8 -
Accumulated loss (2 639.9) (2 359.4)
Other comprehensive (loss)/income ( 22.8) 55.5
Total liabilities & stockholders` equity 1 788.2 2 104.2
CHANGES IN STOCKHOLDERS` EQUITY - US GAAP
(Unaudited) (R m) (R m) (R m)
Quarter Quarter 12 months to
Jun 2004 Mar 2004 Jun 2004
Stockholders` equity at the
beginning of the period 861.6 570.5 39.1
Share capital issued 23.1 224.4 900.5
- for acquisition finance and
cash 20.0 217.4 882.4
- for share options exercised
& issue expenses ( 1.0) 2.8 2.2
- for stock based compensation 4.1 4.2 15.9
Movement in retained income ( 353.0) 66.7 ( 407.9)
- (Loss)/profit applicable to
stockholders ( 280.5) 64.7 ( 385.0)
- minority shareholders`
interest 5.8 - 5.8
- mark-to-market on
investments 9.8 1.7 30.4
- foreign currency adjustments
and other ( 88.1) 0.3 ( 59.1)
Stockholders` equity at the
end of the period 531.7 861.6 531.7
GROUP INCOME STATEMENTS - US GAAP
FINANCIAL RESULTS (US$ m) (US$ m) (US$ m)
(Unaudited) Quarter Quarter 12 months to
Jun 2004 Mar 2004 Jun 2004
Revenues
Product sales (Gold revenue) 80.3 88.4 316.2
Cost and expenses ( 75.6) ( 69.4) ( 287.9)
Production costs ( 73.8) ( 71.9) ( 285.5)
Movement in gold in process 0.3 3.0 1.0
Movement in rehabilitation
provision ( 2.1) ( 0.5) ( 3.4)
Other operating expenses
Depreciation and amortization ( 12.2) ( 3.6) ( 31.2)
Impairment of mining assets
and investments ( 15.3) ( 1.2) ( 16.4)
Employment termination costs ( 0.2) ( 1.6) ( 8.0)
Management and consulting fees ( 1.0) ( 0.4) ( 2.4)
Profit on financial
instruments 0.9 2.9 0.8
Administration and
general charges ( 4.2) ( 3.3) ( 12.9)
Stock based compensation costs ( 0.6) ( 0.6) ( 2.3)
Administration and general
charges ( 3.6) ( 2.7) ( 10.6)
Net operating (loss)/income ( 27.3) 11.8 ( 41.8)
Non-operating income
Interest and dividends 1.4 1.2 5.9
Other income 0.1 0.5 1.9
Finance cost
Interest income/(expense) 0.9 ( 2.8) ( 7.5)
(Loss)/profit before taxation and
other items ( 24.9) 10.7 ( 41.5)
Income and mining tax expense ( 4.5) ( 2.2) ( 7.4)
Deferred taxation
(expense)/benefit ( 12.9) 1.2 ( 6.9)
Net (loss)/profit applicable to
stockholders ( 42.3) 9.7 ( 55.8)
Basic (loss)/profit per share
(cents) ( 18.2) 4.2 ( 25.8)
Diluted (loss)/profit per share
(cents) ( 18.2) 3.2 ( 25.8)
GROUP CASH FLOW STATEMENTS - US GAAP
ABRIDGED (US$ m) (US$ m) (US$ m)
(Unaudited) Quarter Quarter 12 months to
Jun 2004 Mar 2004 Jun 2004
Net cash (out)/inflow
from operating activities ( 10.1) 7.7 ( 7.7)
Working capital changes 5.1 14.1 19.6
Net cash (used in)
investing activities ( 4.4) ( 7.9) ( 94.5)
Net cash (out)/inflow from
financing activities (6.2) 10.2 63.4
Net (decrease)/increase in
cash & equivalents ( 15.6) 24.1 ( 19.2)
Effect of exchange rate
changes on cash ( 9.8) 1.9 ( 2.7)
Cash and equivalents at
beginning of period 47.9 21.9 44.4
Cash and equivalents at end
of period 22.5 47.9 22.5
GROUP BALANCE SHEETS - US GAAP
ABRIDGED (US$ m) (US$ m)
(Unaudited) Quarter Quarter
Jun 2004 Mar 2004
ASSETS
Current assets 58.5 82.9
Cash and cash equivalents 22.5 47.9
Receivables 19.5 18.2
Inventories 16.5 16.8
Mining assets 156.9 168.0
Cost 482.6 480.3
Accumulated depreciation & amortisation (325.7) ( 312.3)
Non-current assets 69.6 80.3
Total assets 285.0 331.2
LIABILITIES & STOCKHOLDERS` EQUITY
Current liabilities 75.1 76.1
Bank overdraft 1.8 5.7
Accounts payable and accrued liabilities 66.7 63.7
Short-term portion of long-term loans 6.6 6.7
Long-term loans 2.7 3.1
Convertible loan note 57.2 60.4
Derivative instruments 5.1 15.0
Deferred income and mining tax 21.1 6.9
Provision environmental rehabilitation 39.1 34.0
Stockholders` equity 84.7 135.7
Authorised
300 000 000 ordinary no par value shares
5 000 000 cumulative preference shares
Issued
233 307 667 ordinary no par value shares
5 000 000 cumulative preference shares
Stated capital and share premium 484.1 481.0
Additional paid in capital 40.0 39.4
Cumulative preference shares 0.1 0.1
Minority stockholders` interest 0.9 -
Accumulated loss ( 396.2) ( 353.9)
Other comprehensive (loss)/income ( 44.2) ( 30.9)
Total liabilities & stockholders` equity 285.0 331.2
CHANGES IN STOCKHOLDERS` EQUITY - US GAAP
ABRIDGED (US$ m) (US$ m) (US$ m)
(Unaudited) Quarter Quarter 12 months
Jun 2004 Mar 2004 Jun 2004
Stockholders` equity at the
beginning of the period 135.7 85.6 5.2
Share capital issued 3.6 33.3 126.0
- for acquisition finance
and cash 3.2 32.4 123.4
- for share options
exercised & issue expenses (0.2) 0.3 0.3
- for stock based compensation 0.6 0.6 2.3
Movement in retained income ( 54.6) 16.8 ( 46.5)
- (loss)/profit applicable to
stockholders ( 42.3) 9.7 ( 55.8)
- minority stockholders
interest 0.9 - 0.9
- mark-to-market on
investments 1.2 0.3 4.4
- foreign currency adjustments
and other (14.4) 6.8 4.0
Stockholders` equity at the end
of the period 84.7 135.7 84.7
NON-US GAAP FINANCIAL DATA
Quarter Quarter 12 months to
Jun 2004 Mar 2004 Jun 2004
Cash cost US$ per ounce 355 318 344
Total cost US$ per ounce 518 357 443
Total Costs and Cash Costs
Total costs is a non-U.S. GAAP measurement that represents the full amount of
costs incurred and represents the difference between revenues from gold bullion
and related by-products delivered to refineries and profits or losses before
taxation and includes the effects of any changes in accounting policy. Total
costs per ounce are calculated by dividing total costs by ounces of gold
produced.
Cash costs are costs incurred directly in the production of gold and include
labor costs, contractor and other related costs, inventory costs and electricity
costs. Although described as `cash` costs, this measure is computed under the
accrual method of accounting required under U.S. GAAP, but excludes certain non-
cash amounts, such as depletion, depreciation and amortization, which are
required to be included in measures computed under U.S. GAAP. Cash costs have
been calculated on a consistent basis for all periods presented.
Cash costs should not be considered by investors as an alternative to net
operating income or net profit applicable to common stockholders or as an
alternative to other U.S. GAAP measures and may not be comparable to other
similarly titled measures of other companies. However, we believe that cash
costs and cash costs per ounce are useful indicators to investors and management
of the performance of individual mines and our operations as a whole, as they
provide:
? an indication of a mine`s profitability and efficiency;
? the trend in costs as the mine matures;
? a measure of a mine`s gross margin per ounce, by comparison of the
cash costs per ounce by mine to the price of gold;
? an internal benchmark of performance to allow for comparison against
other mines; and
? a basis for benchmarking against other mining companies with similar
assets.
During the annual planning process, cash cost per ounce targets are set for each
month by our board of directors. These targets are adjusted for changes in
exchange rates on a monthly basis. Variances are analyzed monthly, taking into
account volume changes, production and labor efficiencies, price variances and
changes of scope. For negative variances, a plan of action is agreed upon by
management to address the situation.
The following table lists the components of cash costs for each of the years set
forth below:
Error! Bookmark not defined.
Costs Quarter Quarter 12
Jun Mar months
2004 2004 to Jun
2004
Labor 50% 50% 50%
Contractor Services 18% 21% 19%
Inventory 21% 20% 20%
Electricity 11% 9% 11%
Cash costs do not include certain factors that bear on our overall financial
performance, including gains and losses on financial instruments, depreciation
and amortization and selling, administration and general charges.
A reconciliation of cash costs to total costs for each of the periods included
in the table above is presented below. In addition, the table below also
provides a reconciliation of cash costs per ounce to total costs per ounce for
each of those periods.
(Unaudited) Quarter Quarter
Jun 04 Mar 2004
US$ m US$/oz US$ m US$/oz
(Loss)/profit before tax and
other items (24.9) 10.7
Add back: Product sales
(Gold revenue) (80.3) (88.4)
Total costs 105.2 518 77.7 357
Adjusted for:
Finance income/(expense) 0.9 4 (2.8) (13)
Non-operating income 1.5 7 1.7 8
Admin and general charges (4.2) (21) (3.3) (15)
Depreciation and amortisation (12.2) (60) (3.6) (16)
Impairment of assets and
investments (15.3) (75) (1.2) (6)
Other non-operating costs (3.6) (18) 0.7 3
Cash operating costs 72.3 355 69.2 318
12 months to Jun 04
US$ m US$/oz
(Loss)/profit before tax and
other items (41.5)
Add back: Product sales(Gold revenue) (316.2)
Total costs 357.7 443
Adjusted for:
Finance income/(expense) (7.5) (9)
Non-operating income 7.8 10
Admin and general charges (12.9) (16)
Depreciation and amortisation (31.2) (39)
Impairment of assets and investments (16.4) (20)
Other non-operating costs (19.9) (25)
Cash operating costs 277.6 344
CONVERSION FACTORS
Balance Sheet: 30 Jun 04 US$1 = R 6.2750
Income Statement average: Quarter Jun 04
Apr-04 US$1 = R 6.5310
May-04 US$1 = R 6.8075
Jun-04 US$1 = R 6.4482
Quarter US$1 = R 6.6071
Year to date US$1 = R 6.9001
Quarter Mar 04
Jan-04 US$1 = R 6.9297
Feb-04 US$1 = R 6.7777
Mar-04 US$1 = R 6.6500
Quarter US$1 = R 6.7859
SHARE OPTION SCHEME
The following summary provides information in respect of the Durban
Roodepoort Deep (1996) Share Option Scheme as
at 30/06/2004: % of issued
No. of options capital
In issue: 8 345 363 3.6
Options currently vested: 3 342 479 1.4
DIRECTORS - (*British)(**Australian)
Executives :
MM Wellesley-Wood (Executive Chairman)*
IL Murray (Chief Executive Officer and Chief Financial Officer)
Non-executives :
MP Ncholo ; RP Hume ; GC Campbell* ; DC Baker** ; D Blackmur**
Alternate :
A Lubbe
Group Company Secretary : AI Townsend
INVESTOR RELATIONS
For further information, contact Ilja Graulich at :
Tel: (+27-11) 381-7800, Fax: (+27-11) 482-4641,
e-mail: Ilja.graulich@za.drdgold.com,
web site: http://www.durbans.com
45 Empire Road,
Parktown,
South Africa.
P O Box 390,
Maraisburg, 1700,
South Africa.
Date: 10/08/2004 08:04:36 AM
Produced by the JSE SENS Department
