H2 F2009 H2 F2009 GENERATING GENERATING GENERATING GENERATING - PowerPoint PPT Presentation

H2 F2009 H2 F2009 GENERATING GENERATING GENERATING GENERATING FREE CASH FLOW FREE CASH FLOW FREE CASH FLOW FREE CASH FLOW Q2 F2009 RESULTS Johannesburg Johannesburg 29 January 2009

1 Forward Looking Statements INTRODUCTION INTRODUCTION Certain statements in this document constitute “forward looking statements” within the meaning of Section 27A of the US Securities Act of 1933 and Section 21E of the US Securities Exchange Act of 1934. 1933 and Section 21E of the US Securities Exchange Act of 1934 Such forward looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the company to be materially different from the future results, performance or achievements expressed or implied by such forward looking statements. Such risks, uncertainties and other important factors include among others: economic and other important factors include among others: economic, business business and political conditions in South Africa; decreases in the market price of gold; hazards associated with underground and surface gold mining; labour disruptions; changes in government regulations, particularly environmental regulations; changes in exchange rates; currency devaluations; inflation and other macro-economic factors; and the impact of the AIDS crisis in South Africa. These forward looking statements speak only as of the date of this document only as of the date of this document. The company undertakes no obligation to update publicly or release any revisions to these forward looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. 2

2 EMERGENCY PROCEDURES EMERGENCY PROCEDURES • In the event of an emergency an alarm will sound • Exit premises through doors on the north side of room p g • Congregate on lawns to the north of the building C f • Await further instructions 3

3 PROGRAMME PROGRAMME Introduction Nick Holland Chief Executive Officer Financial Review Paul Schmidt Chief Financial Officer South Africa Review Vishnu Pillay Head of South African Operations International Review Glenn Baldwin Head of International Operations Strategy Review and Conclusion Nick Holland Chief Executive Officer Questions and Discussion Willie Jacobsz Head of Investor Relations 4

Introduction Introduction Nick Holland Chief Executive Officer

5 CFO Appointed INTRODUCTION INTRODUCTION Paul Schmidt Chi f Fi Chief Financial Officer i l Offi LEADERSHIP TEAM BEDDED DOWN LEADERSHIP TEAM BEDDED DOWN 6

6 Strategy To Release Value INTRODUCTION INTRODUCTION Again A Four Million Ounce Producer Notional Notional Cash Expenditure FREE FREE (NCE) SAFETY SAFETY CASH FLOW CASH FLOW Total cash costs + All C All Capital it l Growing Gold Fields Q3 F09 TARGET Operational Excellence Excellence ~4 moz run rate 4 t Securing annualised the Future NCE of ~US$725/oz @ R:US$8.00 UNHEDGED (Copper at US$6,000/ton and Gold at US$800/oz) RECOVERY STRATEGY PRESENTED 9 MAY 2008 RECOVERY STRATEGY PRESENTED 9 MAY 2008 7 7

7 Strategy To Release Value INTRODUCTION INTRODUCTION DELIVERING OUR COMMITMENTS GUIDANCE • Q1 and Q2 F09 production and cost targets achieved TARKWA • CIL plant expansion completed EXPANSION • 1 mtpm design capacity by 23 Dec 08. • Capital project completed • Capital project completed CERRO CORONA • 500,000 tpm name plate capacity by late Dec 08 • Belleisle and Cave Rocks ramped up by Dec 08 ST IVES • Production build-up as underground mines deliver OVER THE CAPITAL HUMP OVER THE CAPITAL HUMP 8

8 Strategy To Release Value INTRODUCTION INTRODUCTION SAFETY PROJECTS KLOOF • Main Shaft steel replacement completed on schedule DRIEFONTEIN • Critical secondary support backlog completed • 95 2 & 3 West Ramps rehabilitation completed SOUTH DEEP • Vent Raise Hole repaired PILLAR MINING • Pillar mining review completed and implemented SOUTH AFRICA TO INCREASE PRODUCTION FROM 15.5 TONS TO 18 TONS OF GOLD PER QUARTER ALL REHABILITATION PROJECTS COMPLETED ALL REHABILITATION PROJECTS COMPLETED 9

9 Strategy To Release Value INTRODUCTION INTRODUCTION STEP CHANGE IN SAFETY Du Pont Safety Review completed Training and Culture interventions ongoing Training and Culture interventions ongoing Significant improvements in all safety metrics Si ifi t i t i ll f t t i 8 Fatalities year to Dec against total of 47 for F2008 “WE WILL NOT MINE IF WE CANNOT MINE SAFELY” “WE WILL NOT MINE IF WE CANNOT MINE SAFELY” 10

10 Strategy To Release Value INTRODUCTION INTRODUCTION Q2 F2009 RESULTS Gold production • Up 5% to 839,000 attributable ounces • ZAR – flat at R153,893 Cash costs Cash costs (US$ - down 21% to US$ 487/oz) • ZAR - up 8% to R244,210 NCE (US$ - down 15% to US$774/oz) (US$ down 15% to US$774/oz) Operating profit • Up to R2,566m Net earnings • Up to R483m Normalised earnings Normalised earnings • Up to R542m Up to R542m Interim Dividend • R0.30 per share GUIDANCE ACHIEVED GUIDANCE ACHIEVED 11

11 Strategy To Release Value INTRODUCTION INTRODUCTION HIGHER GOLD PRICE + Higher production + Weaker exchange rate + Lower input costs Lower Lower NCE NCE NCE NCE + Lower capex = IMPROVED FREE CASH FLOW A BETTER H2 F2009 A BETTER H2 F2009 12

Financial Review Financial Review Paul Schmidt Chief Financial Officer

13 Q2 F2009 FINANCIAL REVIEW Salient Features Q2 F2009 FINANCIAL REVIEW Q2F2009 Q2F2009 Q1F2009 Q1F2009 839 798 Gold Produced 1 000oz 9.82 7.74 Exchange rate ZAR/US$ 792 874 US$/oz 250,058 250 058 217,586 217 586 Revenue Revenue R/kg R/kg 7,074 5,724 Rm 4,508 4,150 Operating costs, net Rm 340 333 R/ton Operating costs 973 1,038 SA ug R/t 2,566 , 1,574 , Operating profit Operating profit Rm Operating margin 36 27 % Total cash costs 153,893 153,461 R/kg 487 487 617 617 US$/oz US$/ Notional cash expenditure 2 (NCE) 244,210 226,120 R/kg 774 909 US$/oz 1 Attributable 2 NCE = Operating cost + Capex 14

14 Q2 F2009 FINANCIAL REVIEW Income Statement Q2 F2009 FINANCIAL REVIEW Q2F2009 Q2F2009 Q1F2009 Q1F2009 2,566 1,574 Operating profit Rm (1,033) (1 033) (902) (902) Amortisation & depreciation Rm 1,533 672 Net operating profit Rm (164) (112) Finance cost Rm (47) (47) (104) (104) Share of loss of associates Share of loss of associates Rm Rm (66) (56) Loss on financial instruments Rm (136) (68) Exploration Rm (100) (120) Other expenses Rm 1,020 212 Profit before tax & exceptional items Rm (5) 115 Exceptional items Rm Mining & income tax (496) (257) Rm 519 519 70 70 Net profit Net profit Rm Rm Net profit attributable to minority 36 31 Rm shareholders 483 39 Net profit attributable to ordinary p y Rm shareholders 74 6 SA cps 542 120 Rm Normalised earnings Normalised earnings SA cps 83 18 15

15 Q2 F2009 FINANCIAL REVIEW Cash Flow Statement Q2 F2009 FINANCIAL REVIEW Q2F2009 Q2F2009 Q1F2009 Q1F2009 1,787 1 787 (32) (32) Cash flows from operations Cash flows from operations Rm Rm - (785) Dividend paid Rm (2,345) (2 345) (1 811) (1,811) C Capital expenditure net it l dit t Rm (5) (97) Other investing activities Rm (340) 2,596 Net loans (repaid)/received Rm 9 3 Other financing activities Rm (894) (126) Net cash outflow Rm 130 (63) Currency translation adjustment Rm 1,818 2,007 Cash at beginning of period Rm 1,054 , 1,818 , Cash at end of period p Rm 16

16 Balance Sheet Q2 F2009 FINANCIAL REVIEW Q2 F2009 FINANCIAL REVIEW Net Debt as at End December 2008 Rm $m Loans - Long term (10,016) (1,039) Loans - Short term (392) (41) Total loans T t l l (10,408) (10 408) (1 080) (1,080) Less cash and deposits 1,054 110 Net debt (9,354) (970) Less investments 4,360 , 452 Net debt after investments (4,994) (518) DEBT LEVELS WITHIN COMFORT RANGE 17

17 Financial Flexibility Q2 F2009 FINANCIAL REVIEW Q2 F2009 FINANCIAL REVIEW Headroom Available Rand Denominated US$ Denominated Rm $m Uncommitted Facilities 550 40 Committed Facilities 500 150 Total credit 1,050 190 Debt Maturity Profile (Rm) as at Dec 2008* 6,000 Refinancing Plan g 4,820 4 820 5,000 3,410 4,000 3,000 • Free cash flow 1,446 Free cash flow 2 000 2,000 • Local market remains liquid and cost effective 640 500 1,000 0 F09 Q4 F10 Q2 F10 Q3 F11 Q4 F15 Q4 Maturity y * Converted at US$1 : R9.64 AMPLE LIQUIDITY 18

18 Capital Expenditure Profile Q2 F2009 FINANCIAL REVIEW Q2 F2009 FINANCIAL REVIEW F2009 F2009 All Amounts Rm Q2 Q2 Q3 Q3 Q4 Q4 Q1 Q1 Growth Projects: Actual Actual Forecast Forecast • Cerro Corona 371 - - 168 • Tarkwa CIL Expansion 328 - - 278 • South Deep 256 280 320 189 Total growth projects 955 280 320 635 • Sustaining Capex – South 350 350 386 386 361 361 288 288 Africa • Sustaining Capex – 731 890 851 568 (US$73) International (US$76) (US$89) (US$85) • ORD – SA Operations 301 331 339 311 Total Capital Expenditure 2,337 1,887 1,871 1,802 ALL GROWTH PROJECTS FULLY CAPITALISED 19