DRDGOLD, which mines gold dumps around Johannesburg, generated R5.26 billion in revenue during the year ended June 2021, up 26 percent from the R4.1bn recorded a year earlier on strong metal prices.
The group’s Ergo operations enjoyed a robust performance, posting a 29 percent hike in revenue to R3.94bn from R3.06bn mainly on the back of the 20 percent increase in the rand gold price and as the company’s gold sales jumped by 7 percent.
“Volume throughput increased by 13 percent to mitigate a 6 percent decrease in yield, due mainly to the previously reported depletion of highgrade reserves available to the Knights plant,” said the group.
Revenue at Far West Gold Recoveries (FWGR) increased by 18 percent to R1.326bn up from R1.120bn in 2020, due mainly to an 18 percent increase in the rand gold price received as well as a 1 percent increase in gold sold. DRDGold said volume throughput increased by 2 percent as yield remained stable at 0.237 grams a ton.
DRDGold, which is majority owned by Sibanye-Stillwater, grappled with high production costs. The group said the impact of the increase in revenue on earnings and headline earnings was moderated by a 17 percent increase in cash operating costs to R3.072bn from R2.626bn in 2020. Cash operating costs were R2.66bn at the Ergo plant in Brakpan, 17 percent higher than the R2.2bn recorded in the prior year due to higher volumes, a spike in power costs and more use of reagents.
DRDGold said higher costs associated with milling, which was not operational for the whole of the previous corresponding period, had resulted in a 15 percent increase in cash operating costs at FWGR to R406.2 million from R352m in 2020.
The company said at the end of June 2021 cash and cash equivalents was R2.18bn, up from R1.715bn, with a R200m revolving credit facility with Absa, available if needed.
“During the year ended June 30, 2021, DRDGold generated free cash inflow from operating activities, less cash outflow from investing activities of R1.1bn and paid cash dividends of R640.9m,” said the group.
Earnings a share (Eps) and headline earnings per share (Heps) were expected to surge by between 94 and 114 percent, representing an increase of between 160.1c and 176.5c, compared to Eps and Heps of 82.5c and 82.4c for the year ended June 30, 2020.
DRDGold’s share price closed 2.95percent lower at R13.80 on the JSE yesterday.
BUSINESS REPORT