ANKARA, Turkey--(BUSINESS WIRE)--
Operational and Strategic Highlights
- Record full year production, up 12% to 256,000 thousand ounces of gold in 2010 from 228,000 ounces of gold in 2009
- Increased proven and probable reserves base in 2010 to 2.1 million ounces of gold from 1.9 million ounces of gold (as at 30 September 2009)
- Increased measured and indicated resource base in 2010 to 5.9 million ounces of gold from 3.7 million ounces of gold (as at 30 September 2009)
- Signed new refinery agreement, reducing refinery and transportation costs for domestically sold doré by 60% and removing the 1% sale commission for exported doré
- Acquired 63 licensed areas including all exploration works from Newmont Mining Corporation on 28 June 2010 for $8.5 million
Financial Highlights
-
Revenue up 38% to TL472.1 million in 2010 from TL342.4 million in 2009
- Total gold sales volume up 13% to 253,000 ounces of gold, driven by the ramp up in production at the Mastra mine
- Increased average gold selling price of $1,232 per ounce in 2010 from $990 per ounce in 2009
- EBITDA up 42% to TL347.0 million in 2010 from TL244.7.0 million in 2009
- Net income up 60% to TL235.6 million in 2010 from TL146.8 million in 2009
- EPS up 60% to TL1.54 in 2010 from TL0.96 in 2009
- Solid financial position with year end cash balance of TL196.7 million and debt balance of TL29.9 million
| TL million, unless otherwise stated | FY2010 | FY2009 | % Change | ||||
| Gold production (koz) | 256 | 228 | 12% | ||||
| Gold sales volume (koz) | 253 | 224 | 13% | ||||
| Revenue | 472.1 | 342.4 | 38% | ||||
| EBITDA1 EBITDA defined as operating profit plus depreciation & amortisation as part of Cost of Sales. | 347.0 | 244.7 | 42% | ||||
| % Margin | 73.5% | 71.5% | n/a | ||||
| EBIT2 EBIT defined as operating profit. | 282.5 | 183.6 | 54% | ||||
| % Margin | 59.8% | 53.6% | n/a | ||||
| Net Income | 235.6 | 146.8 | 60% | ||||
| Earnings per share (TL/share) | 1.54 | 0.96 | 60% | ||||
| Net cash flow from operations | 319.8 | 175.9 | 82% | ||||
| Capex | 127.9 | 95.2 | 34% | ||||
| Unit cash cost ($/oz) | $320 | $270 | 19% |
1 EBITDA defined as operating profit plus
depreciation & amortisation as part of Cost of Sales.
1
EBIT defined as operating profit.
Production and Sales Volumes
Total gold production in 2010 was 12% higher than 2009, primarily driven by the ramp up in production at Koza Gold’s second production hub, Mastra. Gold sales subsequently increased 13%.
Ore production at the Cukuralan mine (40km from Ovacik) commenced in August 2010 and the extracted ore has now commenced transportation to the Ovacik hub.
Revenue
| FY2010 | FY2009 | % Change | |||||
| Average realised price ($/oz) | 1,232 | 990 | 24% | ||||
| Gold sales volume (koz) | 253 | 224 | 13% | ||||
| Revenue (TL million) | 472.1 | 342.4 | 38% |
Revenue was 38% higher in 2010, driven by increases in both production and realised gold price.
Cost of Sales
| TL million, unless otherwise stated | FY2010 | FY2009 | |||
| Amortisation & depreciation | 64.4 | 61.0 | |||
| Staff costs | 16.5 | 10.5 | |||
| Chemicals and direct supplies | 14.9 | 14.4 | |||
| Maintenance | 12.2 | 8.6 | |||
| Utilities | 6.9 | 4.8 | |||
| Transportation costs | 6.3 | 4.7 | |||
| Royalty | 5.1 | 3.0 | |||
| Rent | 2.0 | 3.6 | |||
| Other | 13.1 | 8.3 | |||
| Total | 141.4 | 118.9 |
The increase in cost of sales was primarily attributable to additional employees hired in connection with the commencement of operations at Kaymaz and Cukuralan. The increase in wages was generally in line with inflation.
General Management Costs
| TL million, unless otherwise stated | FY2010 | FY2009 | |||
| Staff costs | 13.9 | 11.2 | |||
| Consultancy | 3.4 | 2.4 | |||
| Travel & accomodation | 2.7 | 1.9 | |||
| Outsourced services | 2.3 | 2.3 | |||
| Donations | 1.7 | 0.9 | |||
| Taxes and funds | 1.0 | 1.6 | |||
| Energy and utilities | 0.8 | 0.6 | |||
| Communication | 0.9 | 0.5 | |||
| Insurance | 0.6 | 0.4 | |||
| Maintenance | 0.5 | 0.3 | |||
| Other | 3.2 | 3.5 | |||
| Total | 31.1 | 25.6 |
The increase in general management costs is primarily driven by the ramp-up of production at our Mastra mine. The increase in Consultancy costs relates to IPO costs, incurred in the beginning of the year, and audit costs. The Company was listed on the Istanbul Stock Exchange in 12 February 2010.
Dividends
In 2010, TL27.5 million was distributed as cash dividend and TL92.5 million as bonus shares to the shareholders.
Koza Gold’s near-term priority is to reinvest its profits into its business and into growth projects to create long-term shareholder value. Within this framework, our Koza Gold has been targeting funding its investment programme with cash flow generated from its currently producing assets.
Koza Gold is subject to current dividend distribution requirements in the Turkish Commercial Code which may be paid in cash, shares or be capitalised. Our policy is to distribute the level of dividends mandated by the CMB solely in the form of cash.
Audit Committee
The Board has approved the formation of an Audit Committee chaired by Koza Gold’s Independent Board Member, Ismet Kasapoglu. The change in the Articles of association regarding the Audit Committee has been approved by the CMB.
Investor Relations
Koza Gold has now established an investor relations department. Okan Bayrak has been appointed to lead the department as Assistant General Manager-IR.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31
DECEMBER 2010 AND 31 DECEMBER 2009
(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
|
As at 31 December 2010 |
As at 31 December 2009 |
||||
| ASSETS | |||||
| Current assets: | 253,616,534 | 123,081,336 | |||
| Cash and cash equivalents | 196,691,766 | 20,826,910 | |||
| Trade receivables from related parties | 0 | 34,892,688 | |||
| Other receivables from related parties | 301 | 9,309,183 | |||
| Other receivables | 7,908,388 | 4,404,473 | |||
| Inventories | 45,584,149 | 52,731,103 | |||
| Other current assets | 3,431,930 | 916,979 | |||
| Non-current assets: | 292,139,087 | 212,396,217 | |||
| Property, plant and equipment | 261,659,147 | 199,431,106 | |||
| Intangible assets | 809,353 | 919,929 | |||
| Goodwill | 14,017,036 | 2,784,852 | |||
| Deferred income tax assets | 8,993,534 | 4,188,089 | |||
| Other non-current assets | 6,660,017 | 5,072,241 | |||
| TOTAL ASSETS | 545,755,621 | 335,477,553 |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31
DECEMBER 2010 AND 31 DECEMBER 2009
(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
|
As at 31 December 2010 |
As at 31 December 2009 |
||||
| LIABILITIES | |||||
| Current liabilities: | 62,038,878 | 56,319,583 | |||
| Borrowings | 12,013,902 | 9,188,029 | |||
| Trade payables to related parties | 321,604 | 208,502 | |||
| Trade payables to other parties | 17,390,360 | 19,681,619 | |||
| Other payables to related parties | 10,396 | 28,383 | |||
| Other payables to other parties | 785,609 | 730,377 | |||
| Current income tax liabilities | 15,835,619 | 16,466,835 | |||
| Provisions | 12,692,147 | 7,437,841 | |||
| Other Current liabilities | 2,989,241 | 2,577,997 | |||
| Non-current liabilities: | 45,097,594 | 48,590,384 | |||
| Borrowings | 17,838,462 | 28,955,769 | |||
| Provisions | 16,780,654 | 18,093,604 | |||
| Provision for employment benefits | 1,975,478 | 1,541,011 | |||
| Other non-current liabilities | 8,503,000 | 0 | |||
| TOTAL LIABILITIES | 107,136,472 | 104,909,967 | |||
| EQUITY | 438,619,149 | 230,567,586 | |||
| Share capital | 152,500,000 | 60,000,000 | |||
| Adjustment to share capital | 3,578,596 | 3,578,596 | |||
| Legal reserves | 44,334,842 | 29,504,842 | |||
| Accumulated losses/Retained earnings | 2,654,148 | (9,335,604) | |||
| Net period income | 235,551,563 | 146,819,752 | |||
| TOTAL LIABILITIES AND EQUITY | 545,755,621 | 335,477,553 |
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIODS ENDED
31 DECEMBER 2010 AND 31 DECEMBER 2009
(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
|
1 January to 31 December 2010 |
1 January to 31 December 2009 |
||||
| Revenue | 472,074,894 | 342,381,493 | |||
| Cost of sales | (141,409,084) | (118,904,889) | |||
| Gross profit | 330,665,810 | 223,476,604 | |||
| General administrative expenses | (31,068,686) | (25,585,931) | |||
| Exploration costs | (14,624,569) | (9,975,717) | |||
| Selling and marketing costs | (3,060,357) | (5,221,297) | |||
| Other operating income | 625,279 | 948,750 | |||
| Other operating expenses | (3,703) | (10,006) | |||
| Operating profit | 282,533,774 | 183,632,403 | |||
| Finance income | 27,320,460 | 11,021,550 | |||
| Finance expense | (21,531,208) | (11,291,092) | |||
| Profit before taxation on income | 288,323,026 | 183,362,861 | |||
| Income tax Expense | (56,802,236) | (38,666,764) | |||
| Deferred Tax Income | 4,030,773 | 2,123,655 | |||
| Profit | 235,551,563 | 146,819,752 | |||
| Other comprehensive income for the period/year, net of tax | 0 | 0 | |||
| Total comprehensive income for the period/year | 235,551,563 | 146,819,752 | |||
| Earnings per share | 1.5446 | 0.9628 |
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIODS
ENDED 31 DECEMBER 2010 AND 31 DECEMBER 2009
(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
|
1 January to 31 December 2010 |
1 January to 31 December 2009 |
||||
| Cash flows from operating activities: | |||||
| Profit before taxation on income | 288,323,026 | 183,362,861 | |||
| Adjustments to reconcile profit to net | |||||
| Cash generated from operating activities: | |||||
| Depreciation and amortisation | 66,183,311 | 75,015,703 | |||
| Interest income | (8,133,854) | (957,384) | |||
| Interest expense | 1,218,105 | 651,380 | |||
| Provision for employment benefits | 771,618 | 761,370 | |||
| Royalty Costs | 5,934,641 | 2,041,016 | |||
| Exploration costs | 14,624,569 | 9,975,717 | |||
| Depletion cost | 1,335,992 | 1,286,300 | |||
| (Gain)/ loss from sales of property, plant and equipment and intangible assets- net | (174,912) | (630,673) | |||
| Taxes paid | (57,433,452) | (26,437,562) | |||
| Net cash generated before changes in assets and liabilities | 312,649,044 | 245,068,728 | |||
| Changes in assets and liabilities: | |||||
| Decrease / (increase) in inventories | 7,146,954 | (31,732,112) | |||
| Decrease in due from the related parties- trade receivables | 34,892,688 | (27,387,040) | |||
| Decrease / (increase) in other assets and receivables | (4,514,483) | 3,129,974 | |||
| Decrease in trade payables | (3,040,269) | (822,834) | |||
| Decrease in due to the related parties- trade receivables | 113,102 | (126,359) | |||
| Increase / (decrease) in other short term liabilities | (10,996,743) | 1,674,153 | |||
| Payment for rehabilitation activies | (2,397,072) | (3,985,351) | |||
| Payment for exploration activities | (13,875,559) | (9,499,852) | |||
| Employment benefits paid | (337,151) | (239,598) | |||
| Unrealized foreign exchange (losses)/gains | 181,462 | (89,410) | |||
| Net cash generated from operating activities | 319,821,973 | 175,990,299 |
CONSOLIDATED STATEMENTS OF CASH FLOWS
AT 31 DECEMBER
2010 AND 31 DECEMBER 2009
(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated)
|
1 January to 31 December 2010 |
1 January to 31 December 2009 |
||||
| Cash flows from investing activities: | |||||
| Interest received | 8,170,614 | 1,732,816 | |||
| Purchases of property, plant and equipment and order advances given | (127,911,878) | (95,171,527) | |||
| Proceeds from sales of property, plant and equipment and intangibles | 193,602 | 1,141,431 | |||
| Proceeds from the related parties- non-trade receivables | 16,394,824 | 18,733,697 | |||
| Loans granted to the related parties- non-trade receivables | (7,311,962) | (17,458,728) | |||
| Increase in other liabilities related to subsidiary acquisition | 8,503,000 | 0 | |||
| The cash out of during the acquisition of subsidiaries | (4,771,828) | 0 | |||
| Net cash used in investing activities | (106,733,628) | (91,022,311) | |||
| Cash flows from financing activities: | |||||
| Redemption of bank borrowings | (10,991,292) | (2,322,476) | |||
| Proceeds from bank borrowings | 0 | 0 | |||
| Interest paid | (1,276,054) | (486,336) | |||
| Loans granted by the related parties- non-trade payables | 0 | 13,684,825 | |||
| Goodwill | 0 | 0 | |||
| Repayment to the related parties - non-trade payables | (17,987) | (13,933,512) | |||
| Dividends paid | (27,500,000) | (69,653,898) | |||
| Unrealized Foreign exchange (losses)/gains | 2,380,383 | 0 | |||
| Net cash used in financing activities | (37,404,950) | (72,711,397) | |||
| Net increase/ (decrease) in cash and cash equivalents | 175,683,395 | 12,256,591 | |||
| Cash and cash equivalents at start of year | 20,826,910 | 8,480,909 | |||
| Foreign exchange gains/ (losses) on cash and cash equivalents | 181,462 | 89,410 | |||
| Cash and cash equivalents at the end of year | 196,691,767 | 20,826,910 |