JOHANNESBURG - DRDGOLD, the world’s oldest-listed gold treatment company, has reported a strong financial performance for the six months ended December in the bumper gold price environment.
DRDGold, which owns the Ergo and Far West Gold Recoveries (FWGR) plants, said yesterday that earnings per share and headline earnings per share had surged to 106.2 cents and 115.8c per share compared to earnings per share and headline earnings per share of 48.5c and 48.4c per share for the previous corresponding period, respectively
Group revenue climbed 41 percent to R2.9 billion for the period compared to R2.1bn a year earlier. Revenue from Ergo was R2.26bn during the six months under review, up from R1.5bn in 2019.
DRDGold attributed Ergo’s strong revenue mainly to a 42 percent hike in the rand gold price received coupled with a 1 percent increase in gold sales.
“Volume throughput increased by 3 percent to mitigate a 3 percent decrease in yield due mainly to the previously reported depletion of high-grade reserves available to the Knights plant,” the group said.
Revenue from the FWGR plant was R708.7 million compared to R521.8m due mainly to a 42 percent increase in the rand gold price received.
However, gold sales decreased by 5 percent, a result of a 6 percent decrease in yield to 0.232 grams per ton from 0.248 grams per ton as reclamation progressed towards the lower-grade central portion of the Driefontein No 5 dump.
DRDGold, whose largest shareholder is Sibanye Stillwater with an ownership of 51 percent, has no debt and no hedges and is fully exposed to the current strong gold price
It said cash and cash equivalents was R2.16bn compared with R1.7bn in the six months ended June 2020, with a revolving credit facility with Absa Bank of R200m available if needed.
“The group remains free of any bank debt as at 31 December 2020. Liquidity is further enhanced by current high rand gold price levels,” said DRDGold.
However, the impact of the increase in revenue on earnings and headline earnings was moderated by a 10 percent increase in cash operating costs to R1.51bn from R1.3bn in 2019.
At Ergo, cash operating costs increased by 10 percent to R1.3bn from R1.2bn in 2019 due both to the 3 percent increase in volume throughput and an increase in the use of reagents.
BUSINESS REPORT