DRDGold yesterday flagged it expected an increase of up to 18% in its earnings for the year ended June 30 due to the rand gold price rising by 16%.
In a trading statement, the company said it expected its earnings per share to increase by 9% to 19%. Headline earnings per share (Heps) were likely to rise by 8–18%, amounting to about R1.40 to R1.54.
DRDGold reported that revenue increased by R377.8 million, or 7%, to R5.5 billion compared to the previous comparable period of R5.2m.
The impact of the increase in revenue on earnings and headline earnings was moderated by an increase in cash operating costs of R224.3m, up 6% to R3 688.1m compared to the 2022 financial year, which amounted to R3.5bn.
It said the expected increases in EPS and Heps, respectively, for the current reporting period compared to the previous corresponding period, were mainly due to movements in revenue, cash operating costs and liquidity.
DRDGold said Ergo Mining's revenue increased by R403.7m to R4.108bn. Gold sold dropped by 5% to 3 936kg.
“Gold production decreased as a result of a decrease in throughput tonnages, caused by significant load shedding at the beginning of the financial year affecting particularly the City Deep line, the depletion of high-volume reclamation sites at City Deep and Ergo and the late commissioning of two major new reclamation sites,” it said.
The group said Far West Gold Recoveries's (FWGR) revenue decreased by R25.9m to R1.4bn.
“The 15% decrease in gold sold to 1 337kg was offset by the 16% increase in the rand gold price received. The decrease in the amount of gold sold was a result of a decrease in throughput tonnages due to Driefontein 5 nearing the end of its life of mine and entering final clean-up, and a delay in the commissioning of the new Driefontein 3 reclamation site,” it said.
DRDGold said both Ergo and FWGR costs relating to reagents, diesel, electricity and security experienced above-inflationary increases.
“Additionally, there was a significant increase in machine hire costs to mechanically lift and reclaim material from late phase clean-up sites at both Ergo and FWGR,” it said.
DRDGold held R2.47bn in cash and cash equivalents compared to R2.52bn on June 30 last year.
The group remained free of bank debt.
DRDGold expects to release its annual results for the year ended June 30 on Wednesday.