Johannesburg, South Africa. 15 February 2023. DRDGOLD Limited (JSE: DRD, NYSE: DRD) has taken advantage of a favourable gold price to grow revenue by 6% for the six months ended 31 December 2022. The Company reported a growth in the group’s revenue to R2 654.3 million mainly as a result of an 11% increase in the average Rand gold price received, to R961 022/kg.
Headline earnings per share was 62.3 SA cents and free cash flow of R215.4 million was generated for the period, allowing the Company to declare an interim cash dividend of 20 South African (SA) cents per ordinary share. FY2023 will be the 16th consecutive year that DRDGOLD will have paid a dividend.
Lower production and a 10% increase in cash operating costs to R1 839.5 million decreased group operating profit by 5% to R792.4 million.
Ergo Mining Propriety Limited’s (Ergo’s) revenue grew to R1 958.5 million (HY1 FY2022: R1 804.7 million). Its gold production declined by 5% to 1 996kg amidst a 14% decrease in production throughput to 9.8Mt and a 10% increase in yield to 0.203 g/t. During the six months, Ergo was conducting late phase clean-up at a number of sites that are nearing end of production and where, as the last material is lifted from the site floor, volumes are typically lower and head grades slightly higher. Several interruptions in power supply added to lower tonnes. Although Ergo has extensive backup power capacity and draws power mainly off the Eskom grid, unprecedented load shedding at the tail end of the current reporting cycle caused interruptions at areas serviced by Johannesburg City Power in City Deep. These sites have since been connected directly to an Eskom substation. A number of unscheduled Eskom trip-outs at the Ergo plant and excessive rain also decreased throughput.
Far West Gold Recoveries Proprietary Limited’s (FWGR’s) revenue increased marginally to R695.8 million (HY1 2022: R693.8 million).
Gold production at FWGR decreased by 7% to 735kg due to a 3% decrease in tonnages from 3.1Mt in HY1 FY2022 to 3.0Mt. Yield reduced by 5% to 0.245g/t (HY1 FY2022: 0.257g/t), as a result of the material being processed from the lower grade areas of Driefontein 5 and the periodic suspension of milling in terms of the load curtailment arrangement with Eskom during periods of load shedding, which requires a percentage reduction in electricity consumption.
The Company’s single largest capital investment this year is in own power generating capacity, with the construction of a solar power plant and power storage facility at Ergo continuing apace. Four new reclamation sites due for commissioning before financial year end should also reverse the throughput trend of the period under review.
DRDGOLD remains free of bank debt as at 31 December 2022.
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