Wrap Text
DRA Global Reports FY23 Results
DRA Global Limited
(Incorporated in Australia under the Corporations Act 2001 (Cth))
ACN 622 581 935
ASX / JSE Share Code: DRA
ISIN: AU0000155814
("DRA" or "the Company")
JSE Sponsor: Pallidus Exchange Services Proprietary Limited
RESULTS FOR ANNOUNCEMENT TO MARKET 29 February 2024
APPENDIX 4E
DRA Global Limited | ACN 622 581 935
DETAILS OF REPORTING PERIOD
Reporting period For the year ended 31 December 2023
Previous reporting period For the year ended 31 December 2022
This page and the following 35 pages comprise the year end information given to the ASX under Listing Rule
4.3A. The report is based on accounts that are in the process of being audited, therefore the financial
information is unaudited. The 2023 Annual Report will be released in March 2024.
RESULTS FOR ANNOUNCEMENT TO THE MARKET
% $'000
Revenue Down 1% to 885,180
Profit after taxation attributable to the owners of DRA Global Up 190% to 19,695
There were no dividends paid, recommended or declared during the reporting period or the comparative
period. There was no dividend reinvestment plan in operation during the reporting period.
NET TANGIBLE ASSETS
Reporting period Previous period
Cents Cents
Net tangible assets per ordinary security 344 317
The net tangible assets exclude intangibles, right-of-use assets and lease liabilities.
DRA GLOBAL REPORTS FY23 RESULTS
KEY POINTS
• Culture of continuous safety improvement delivered a 39% reduction in Total
Recordable Injury Frequency Rate (TRIFR) to 0.32. However, the Group's Lost Time
Injury Frequency Rate deteriorated by 15% to 0.15.
• Significant turnaround in operating and financial performance, with FY23
Underlying EBIT of $51.4 million, up >600% from $7.0 million in FY22.
• Revenue stable at $885 million, however significant improvement in quality of
earnings delivered underlying NPAT of $31.6 million.
• Major business units, EMEA Projects and Minopex, exceeded budget expectations.
AMER growth strategy rapidly advancing, with refocused APAC business returning
to earnings stability.
• Adjusted basic earnings per share(i) of 29 cents compared to a loss of 80 cents per
share in FY22.
• Net cash(ii) of $127.7 million, up from $51.3 million in the prior year, with debt
repayments significantly reducing gearing to well within target levels.
• Capital management review underway to establish the optimal capital return
mechanism to shareholders.
• Backlog(iii) increased to $885 million with ongoing focus on core capabilities resulting
in continued positive business outlook.
DRA Global Limited (ASX | JSE: DRA) (DRA, or the Group) reports its financial results for the 2023 financial year(iv) (FY23).
DRA Chief Executive Officer and Managing Director, James Smith said: "I am very pleased to be reporting on
a strong FY23 operational and financial performance for the Group. Our dedicated team has successfully
delivered a business turnaround that has now generated three consecutive halves of stable earnings
performance and cash generation resulting in a strengthened balance sheet."
"We are committed to fostering a culture of continuous safety improvement, focused on active leadership
participation and ongoing awareness programs to help reduce risk at the frontline. While this approach has
resulted in a 39% improvement in TRIFR this year, we are reminded of the importance of the constant focus on
safety."
"We have recorded exceptional results across our core EMEA and Minopex businesses, and strong growth
across our North and South American business units as they continue to deliver a material contribution to the
Group. With legacy issues successfully resolved in the APAC business, we are delighted to report a positive EBIT
for the first time in two years and expect continued operating stability, with a focus on revenue growth going
forward."
"The turnaround in financial performance and strength of our business units has facilitated the progression of
a capital management review to establish the optimal capital return mechanism to shareholders."
"I must thank our teams across the globe for their effort to deliver these solid results. I am confident that with
this stable operating and financial foundation, combined with an existing $885 million in committed pipeline,
we are well placed to build upon the positive outcomes delivered for all of our stakeholders."
FINANCIAL SUMMARY
Financial performance at a glance:
$51.4M $21.8M $127.7M
Underlying EBIT NPAT Net cash
Financial outcomes
Three consecutive halves of strong financial performance readily demonstrate the return to financial stability.
Description Unit FY23 FY22 Change (%)
Revenue $'M 885.2 894.7 (1%)
EBITDA $'M 59.9 18.8 219%
EBIT $'M 47.9 1.5 3,090%
NPAT $'M 21.8 (21.4) 202%
Basic earnings per share Cents 36 (44) 182%
Headline basic EPS Cents 42 (2) 1,989%
Adjusted basic EPS Cents 29 (80) 137%
Underlying EBITDA $'M 63.4 24.3 161%
Underlying EBIT $'M 51.4 7.0 634%
Underlying NPAT* $'M 31.6 0.8 3,851%
Cash and cash equivalents $'M 178.8 134.4 33%
Debt** $'M 51.1 83.1 (38%)
Net cash $'M 127.7 51.3 149%
Net asset value per share Cents 485 466 4%
* Prior year Underlying NPAT restated to exclude valuation allowance against deferred tax assets.
** Debt includes drawn bank financing facilities, lease liabilities and other financial liabilities.
Earnings
The Group delivered a strong FY23 statutory EBIT outcome of $47.9 million, up from $1.5 million in the previous
reporting period. The statutory NPAT outcome of $21.8 million, when compared to a loss of $21.4 million in the
previous reporting period, reflects the Group's sustained return to both operational and financial performance.
DRA internally reports consolidated financial information on an Underlying earnings basis to better reflect
business performance. Certain adjustments are made to Group statutory outcomes to derive Underlying
Earnings.
Total adjustments (+$3.5 million on EBIT) (+$9.8 million on NPAT) to reconcile FY2023 Underlying Earnings
include:
• Fair value gains on Upside Participation Rights (UPRs) of $3.6 million pre-tax, primarily driven by the
movement of DRA's share price which impacted the value of the UPRs issued and is not representative of
DRA's underlying financial performance. UPRs expired on 31 December 2023.
• Impairment of goodwill and other intangibles of $3.5 million pre-tax, representing a non-cash impairment
of goodwill of $3.5 million in relation to the SENET cash generating unit (CGU).
• Legal and other expenses associated with disputes (including litigation commenced pre-IPO disputes) of
$3.6 million pre-tax.
• Tax effect of all EBIT adjustments of $1.1 million tax benefit.
• Valuation allowance expense against deferred tax assets of $7.4 million.
DRA's revenue for the year was $885.2 million, compared to $840.9 million in the previous reporting period
(excluding $53.8 million revenue from the G&S Engineering business in FY22). Underlying earnings increased to
$51.4 million, up from $7.0 million in FY22. The Group's 5% year-on-year revenue growth and meaningful step-
up in earnings was driven by growth from contracts and extensions across business units and supported by
increasing client capital investment across geographies and sectors, particularly relating to the global energy
transition and critical minerals. EMEA achieved year-on-year revenue growth of 15%, Minopex achieved 9% and
AMER achieved 22%. APAC has stabilised after the successful divestment of the G&S Engineering business in the
prior year.
Underlying EBIT increased to $51.4 million, from $7.0 million in the previous reporting period. The result was
driven by revenue growth across new contracts and contract extensions across business units. The high global
inflationary environment continues to impact on the cost of doing business, which the Group has offset by
targeted cost-saving initiatives for stable operating margins.
DRA continues to incur or provide for costs in relation to legal disputes, including litigation commenced pre-IPO,
as well as other legacy matters. The current year includes $22.0 million in relation to such costs and
provisioning for credit losses in relation to legacy matters. The outcomes of such legal matters have the
potential to positively or negatively impact (relative to current provisioning) DRA's financial performance.
Segment operating performance
EMEA reported revenue of $289.9 million (up 15% from $251.4 million in FY22) with an EBIT contribution of $45.3
million (up 7%, compared to $42.5 million in FY22). The EMEA business is highly regarded in the region, with
robust and diverse capabilities delivering consistent performance and stable margins. Furthermore, the region
is benefiting from client investment in capital projects across a range of commodities, with both factors
contributing to revenue and EBIT growth during the year.
Minopex reported revenue of $358.2 million (up 9% from FY22 of $327.4 million), for an EBIT contribution of $22.1
million (up 27%, compared to $17.4 million in FY22). During the period, Minopex maintained margins while safely
delivering existing O&M contracts and securing extensions to expiring contracts. A continued focus on business
development activities resulted in the award of a one-off refurbishment contract of a UG2 platinum
concentrator in South Africa.
APAC reported revenue of $146.7 million (down 39% from $241.9 million in FY22), for an EBIT contribution to the
Group of $8.7 million (compared to a loss $61.0 million in FY22). APAC returned to stability and profitability
during the year with the successful divestment of the G&S Engineering business in FY22. The ongoing EPCM
business successfully secured new work with major clients and remains focused on continuing the positive
momentum achieved in FY23.
AMER reported revenue of $90.4 million (up 22% from $74.1 million in FY22), for an EBIT contribution to the Group
of $8.2 million (up 86%, compared to $4.4 million in FY22). Both North and South America are experiencing
strong demand for engineering and project delivery services, and the improved result is a result of a ramp-up
of key projects at improved margins.
Work-in-hand
Work-in-hand as at 31 December 2023 was $885 million (up from $858 million in FY22), which represents
secured work not yet performed in relation to the next and subsequent financial years. Work-in-hand
composition is consistent with DRA's focus on quality of earnings, comprising comparatively less EPC and fixed-
price construction work and higher-margin core EPCM and O&M work. The Group continues to win new work
and extensions on key projects in line with budget expectations.
Financial position
DRA's net cash position improved from $51.3 million at 31 December 2022 to $127.7 million at financial year end,
driven by the strong financial outcomes and a focus on cash conversion.
A significant reduction in Group debt from $83.1 million to $51.1 million (including lease liabilities and other
financial liabilities) was achieved through the full repayment of the Group's Global Banking Facility and partial
repayment of the Group's Revolving Credit Facility (RCF), both of which were fully drawn at the end of FY22. An
outstanding balance of $18.7 million remains on the existing RCF, which is due to mature in FY24 and expected
to be extended during Q2 FY24.
The Group's Capital Management Strategy is structured around delivering value for our shareholders. Net asset
value per share increased by 4%, from $4.66 per share to $4.85 per share, a direct result of significantly
improved profitability as well as diligent working capital management for stronger liquidity and lower levels of
debt. Net gearing reduced significantly from 21% in FY22 to 7% at the end of FY23.
In line with our Capital Allocation Framework, and in recognition of the turnaround in financial performance and
strength of our business units, a capital management review is underway to establish the optimal capital
return to shareholders. The review takes into account the stated dividend distribution policy, targeting annual
dividend distributions of 30% to 60% of net profit after tax from normal operations, having consideration for
other capital allocation priorities and opportunities.
OPERATIONAL HIGHLIGHTS
DRA delivered strong operational performance in FY23, strengthening relationships with key clients and
projects as well as increasing the client base and geographic capacity. The Company has looked to broaden
complimentary service offerings across businesses and regions to provide integrated solutions for all clients.
Business highlights include:
Projects in EMEA
The projects teams in the EMEA region delivered many large-scale projects in FY23, with notable successful
completions including the reconstruction of a crushed ore stockpile conveyor for Newmont at the Ahafo Gold
Mine, delivered in under six months.
Phase 2 of the Kamoa-Kakula Mining Complex in the Democratic Republic of Congo was commissioned and
completed two months ahead of schedule and within budget; an important milestone in establishing one of
the world's richest copper mining complexes.
In recognition of the significant mining opportunities in Tanzania, EMEA Projects expanded its service offerings
with a new office, Thamani Projects, in Dar Es Salaam. Thamani Projects will serve as the regional East African
hub, providing engineering, construction, and project management services to clients in the mining,
infrastructure, and energy sectors.
EMEA Projects completed various studies in copper, gold, lithium, manganese, nickel, platinum group metals
(PGM) and uranium processing across multiple countries. The current pipeline remains strong into FY24, with
more than 50% of studies undertaken now advancing into the feasibility phase. Despite the observed
commodity market turbulence, EMEA has continued to benefit from robust demand for studies in the battery
metals sector, reflected in contract awards for lithium, nickel, copper and manganese.
Our SENET business experienced margin pressure in its traditional markets as competition for project
opportunities increased. In response, optimisation activities have been initiated and new business
development opportunities are being explored to leverage SENET's core capabilities.
Minopex
Despite challenging economic conditions impacting many clients, Minopex demonstrated exceptional
operational performance across its portfolio of contracts and operations during FY23, with over 80% of these
operations surpassing their Key Performance Indicators (KPIs). Notably, Sibanye Kroondal 1, Sibanye Kroondal
2, Ad Duwayhi, and Elandsfontein recorded all-time high operational performances.
Minopex's underground mining business, UMM, continued its operations at the Phalabora Mining Company's
copper mine and Gold Fields South Deep mine. UMM also secured new contracts at Ekapa Diamonds, which
was a strategic expansion effort at the Dutoitspan Shaft, Kimberley, South Africa.
Minopex was awarded the O&M contract at the ARM (African Rainbow Minerals) Bokoni plant. This followed the
successful completion of an eight-month refurbishment contract at the same facility through our Ensersa
subsidiary, showing our commitment to excellence in project execution on plant refurbishments.
Strong operational performances were delivered alongside Minopex's commitment to the health and safety of
its workers, with eleven operations maintaining an injury-free record, and seventeen operations reporting no
lost time injuries for the year. Kroondal Quality Lab Services reached a decade of LTI-free operations, with
Tanzania Quality Lab Services and Sedibeng Operations close behind at nine and five years, respectively.
In June 2023, Minopex launched the NeuroMine Mining Insights Centre, an initiative that forms part of the
Group's strategic commitment to innovation and continuous improvement in delivering value to our
stakeholders. The mining insights centre harnesses the power of data science and artificial intelligence. The
centre offers real-time monitoring, analytics and expert domain-driven insights to drive efficiency, improved
safety and data driven decision making for mine sites.
AMER
Strong growth in AMER has been achieved through an expanded geographical reach and ongoing demand for
feasibility studies. New engagements in Brazil, Colombia and Ecuador, in addition to the core activities across
Canada, Chile, Peru and the USA. AMER has further expanded its core service offering to deliver multiple studies
and securing a maiden EPCM contract at the Mineral Park Restart Concentrator Project in the USA, following on
from the program engineering already delivered.
APAC
The APAC business continued to enhance its stability and foster growth, achieving a total of 501,000
engineering hours in studies, design, field surveillance and commissioning support during the year.
The business benefited from the strong presence of Australian based mining companies working with African
assets, launching an 'ASX into Africa' strategy, alongside, SENET and EMEA Projects to deliver smoother service
offerings to clients. APAC has grown market share in this sector and has established a solid foundation for
continued momentum and profitability.
APAC also continues to support Australia's coal industry, being engaged by Whitehaven Coal to develop its
Vickery Extension project, and ongoing development work with Bravus Mining at its Carmichel mine.
CORPORATE UPDATE
The Company reshaped its Board during the second half of FY23. CEO James Smith was appointed as
Managing Director and Charles Pettit was appointed as Non-Executive Director in July. Sam Randazzo was
appointed Non-Executive Chairman of the Company in October. Lindiwe Mthimunye and Valentine Coetzee
were appointed Non-Executive Directors and Darren Naylor was appointed Executive Director in October.
Former Chair Peter Mansell and Directors Jonathan Velloza, Paul Lombard, Les Guthrie and Sandra Bell
resigned from the Board in October. Lindiwe Mthimunye has been appointed as Chair of the Board's Audit &
Risk Committee.
The Company issued 427,951 new shares on the exercise of options by employees participating in employee
incentive schemes. Subsequent to period end, a further 73,609 shares were issued to participants of employee
share schemes.
OUTLOOK
DRA delivered a strong operational performance in FY23 across the Group, with significant improvement in new
contract awards and extensions of $781 million during the year. With certain EMEA projects nearing expected
completion during FY24, the Group's revenue outlook for H2 FY24 is dependent on the ongoing rate of new
contract awards. However, year-on-year backlog has improved to $885 million as at the beginning of FY24.
The Group's overall pipeline remains strong with $4.1 billion of near and longer-term opportunities at various
stages of development, diversified across Projects and Operations and by geography and commodity. It
includes a balance of future facing minerals and metals to support the global demand for battery technologies
and renewable infrastructure as well as traditional commodities such as gold, base metals and iron ore. DRA's
proven experience across the full spectrum of precious metals, base metals, bulk commodities, battery
minerals and rare earth metals means it is well positioned to deliver for current and future clients.
Competition for skilled talent remains high into FY24, making the Group's commitment to being an employer of
choice within the engineering industry a high priority. DRA strives to develop and grow the diverse, global
workforce in a positive and inclusive culture that supports high-performing teams.
The outlook for the key commodity markets DRA operates in remains fluid in the near-term due to expected
ongoing volatility in commodity prices, particularly noting recent commodity price weakness in nickel, lithium
and PGM markets. Anticipated challenges from certain macroeconomic headwinds include a continued
slowdown in Chinese demand and various geopolitical tensions emerging across the world. Incentivised
investment in critical minerals, driven by initiatives such as the US Inflation Reduction Act and EU Critical
Minerals Act, will continue to positively impact capital expenditure in key regions and commodities.
While interest rates and inflation have recently shown signs of easing, the impact on rising capital and
operating costs will likely continue to have flow-on effects on funding future projects and pipelines of work.
Capital flows continue to migrate towards exploration, development projects and operations focused on the
critical minerals for the energy transition, despite near-term commodity price volatility. Significant focus in
Australia as well as the Americas is expected to positively impact the Group's growth business units over the
medium term.
Ongoing focus on improving the Group's quality of earnings and operating cash flow generation, together with
continued strengthening of the balance sheet, remain a near-term focus for the Board and Management team.
The Board and Management are committed to successfully delivering the Roadmap to 2025, with a focus on
innovation, collaboration and strategic growth, ultimately delivering positive outcomes for clients, people,
communities and shareholders.
JSE DISCLOSURES
Short form announcement
This short-form announcement is the responsibility of the Board of Directors of DRA and is a summarised version of the
Group's full announcement and financial report. As such, it does not contain the full or complete details of the Group's
results for the financial year ended 31 December 2023.
Any investment decision should be made after taking into consideration the full announcement (comprising the
financial report for the financial year ended 31 December 2023), which can be found on the JSE website at:
https://senspdf.jse.co.za/documents/2024/jse/isse/drae/FY23finrep.pdf
The full announcement (comprising the financial report for the financial year ended 31 December 2023), together with
an investor presentation, is also available for inspection, at no charge, by appointment at the registered office of the
Company's JSE sponsor:
• Pallidus Exchange Services Proprietary Limited, Die Groenhuis, 36 Garsfontein Road, Waterkloof, Pretoria
during normal business hours. Alternatively, copies of these documents can also be accessed, or requested via direct
message, under the investor section on the Company website at http://www.draglobal.com/investors/, or accessed at
https://www2.asx.com.au/markets/company/dra.
The Company has a primary listing on the Official List of the ASX and has a secondary listing on the Main Board of the
Johannesburg Stock Exchange.
- ENDS -
This announcement was approved for release by the Board of Directors of DRA Global Limited.
For further information, please contact:
Media enquiries: Investor queries: Shareholder administration:
Michael Vaughan Andrew Prior P: +61 8 6163 5900
Fivemark Partners Fivemark Partners shareholders@draglobal.com
M: +61 422 602 720 andrew.prior@fivemark.com.au
michael.vaughan@fivemark.com.au
ABOUT DRA GLOBAL LIMITED
DRA Global Limited (ASX: DRA | JSE: DRA) (DRA or the Company) is an international multi-disciplinary engineering,
project delivery and operations management group, focused on the mining, minerals and metals industry.
The Group has an extensive track record spanning four decades across a wide range of commodities. We have
delivered more than 8,000 projects, studies and managed services solutions, and currently operate more than a dozen
sites through our operations and maintenance division.
Our teams have deep expertise in the mining, minerals and metals processing industries, as well as related non-
process infrastructure such as water and energy sustainability solutions. We deliver comprehensive advisory,
engineering and project delivery services throughout the capital project lifecycle, from concept through to operational
readiness and commissioning as well as ongoing operations, maintenance and engineering services. We do this with
a focus on sustainability and assisting clients to achieve their ESG goals.
DRA covers all major mining centers with offices across Africa and the Middle East, North and South America, and the
Asia-Pacific.
ABOUT DRA GLOBAL LIMITED
Forward-looking statements
This report contains certain forward-looking statements (including financial forecasts) with respect to the financial
condition, operations and business of DRA Global and certain plans and objectives of the management of DRA Global.
Such forward looking statements involve known and unknown risks, uncertainties and other factors which because of
their nature may cause the actual results or performance of DRA Global to be materially different from the results or
performance expressed or implied by such forward looking statements. Such forward looking statements are based
on numerous assumptions regarding DRA Global's present and future business strategies and the political and
economic environment in which DRA Global will operate in the future, which may not be reasonable and are not
guarantees or predictions of future performance. No representation is made that any of these statements or forecasts
will come to pass or that any forecast result will be achieved or that there is a reasonable basis for any of these
statements or forecasts. Forward-looking statements speak only as at the date of this report and, to the full extent
permitted by law, DRA Global and its Associates being its affiliates and related bodies corporate and each of their
respective officers, directors, employees and agents) and any adviser to DRA or an Associate disclaim any obligation
or undertaking to release any updates or revisions to information to reflect any change in any of the information
contained in this report (including, but not limited to, any assumptions or expectations set out in the report).
Non-IFRS financial information
DRA Global's results are reported under the Australian Accounting Standards as issued by the Australian Accounting
Standards Board which are compliant with the International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board. DRA Global discloses certain non-IFRS measures including Earnings Per
Share (excluding valuation of UPRs) and Headline Earnings Per Shares that are not prepared in accordance with IFRS.
These non-IFRS measures should only be considered in addition to and not as a substitute for, other measures of
financial performance prepared in accordance with IFRS.
Not financial product advice
This report is for information purposes only and is not a financial product or investment advice or a recommendation
to acquire DRA Global securities (or any interest in DRA Global securities) and does not take into consideration the
investment objectives, financial situation or particular needs of any particular investor. You should make your own
assessment of an investment in DRA Global and should not rely on this report. In all cases, you should conduct your
own research and analysis of the financial condition, assets and liabilities, financial position and performance, profits
and losses, prospects and business affairs of DRA Global and its business, and the contents of this report. You should
seek legal, financial, tax and other advice appropriate to your jurisdiction.
(i) Earnings adjusted for revaluation of Upside Participation Rights on issue. Adjusted basic loss/earnings per share is a
non-IFRS measure. Unadjusted basic earnings per share of 36 cps compared to a loss of 44 cps for the corresponding prior period.
(ii) Net cash is determined by adjusting cash for interest-bearing borrowings, leases and other financial liabilities. FY22 Net Cash
position restated to remove impact of $7.8M cash collateralised financial guarantees.
(iii) Includes secured contracts or signed purchase orders.
(iv) DRA's financial year end is 31 December.
12
Date: 29-02-2024 09:00:00
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