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DRDGold still expects to deliver a dividend despite fall in core profit

DRDGOLD says it is debt free as at March 31, 2022.

DRDGOLD says it is debt free as at March 31, 2022.

Published May 5, 2022

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DRDGOLD, which mines gold dumps around Johannesburg, said yesterday that while its core profit decreased in the quarter ended March 31, 2022, due to rising costs, it was still set to declare a final dividend in August.

DRDGold, which is majority owned by Sibanye-Stillwater, in an operating update said its adjusted core profit fell 3 percent to R367.3 million in the three months to end-March, from the previous quarter.

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Adjusted earnings before interest, taxes, depreciation, and amortisation (Ebitda) decreased by 3 percent from the previous quarter to R367.3m primarily due to a 6 percent decrease in gold sold, which was in part offset by a 3 percent increase in the average rand gold price received to R914 864/kg, it said.

Cash and cash equivalents increased by R70.4m to R2.3 billion in the first quarter, compared to the previous quarter. The group said it was debt free as at March 31, 2022.

“The company remains in a favourable position to, in the absence of unforeseen events, consider declaring a final cash dividend in or around August 2022,” DRDGold said.

Gold production decreased by 3 percent from the previous quarter to 1 391kg primarily due to a 5 percent decrease in tonnage throughput, despite a 2 percent increase in yield. Gold sold decreased by 6 percent to 1 377kg, the company said.

“As a result of the above, the cash operating costs per kilogram of gold sold increased by 3 percent from the previous quarter to R605 011/kg. The cash operating costs per ton of material processed increased by 8 percent to R127 per ton,” DRDGold said.

According to the group, all-in sustaining costs per kilogram were R677 996/kg, decreasing quarter on quarter mainly due to a decrease in sustaining capital expenditure.

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“All-in costs per kilogram were R735 948/kg, increasing quarter on quarter mainly due to increased non-sustaining capital expenditure,” the group said.

In February, DRDGold, which comprises of two subsidiaries Ergo and Far West Gold Recoveries, said it was keen to move into other metals in order to align itself with the green metal strategy being implemented by Sibanye-Stillwater, its largest shareholder.

Gold and platinum group Sibanye is moving into battery metals, which are increasingly in demand for the transition away from fossil fuels in favour of cleaner alternatives.

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