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Earnings grow 11% at DRD Gold

by , 23 August 2013

Earlier today, DRD Gold released its full year results to June. And although earnings were up, the miner is feeling the pressure. Read on to find out what the results revealed…

SA’s fifth biggest gold producer, DRD Gold, says its “full year earnings” rose 11%, reports Fin24. The rise is due to “a strong rand/gold price” in the first six months and a rise in production.

Headline earnings per share rose 68c for the period, says IOL. That’s up 7c from the period before.

But in the fourth quarter, earnings “slumped sharply” as the gold price came under pressure, adds IOL. This squeezed SA gold operations.

From April to June, the gold price was 13% down at $1,405 from the same period last year, reports MoneyWeb. The “spot price and the rand/gold price was 8% down”.

DRD Gold, “which processes old mining dumps to extract gold,” boosted its dividend, says BDLive. It increased its “total dividend payment for the year to 28c”. This was after it declared a “final dividend of 14c”.

The results did include some impairments.

Impairments totalling “R238 million were booked in the financial year,” says Fin24. The majority of these charges stem from “its investment in Village Main Reef”.

High costs ate into profits at DRD Gold

DRD Gold’s production rose “8% for the year at 146,381 ounces, says MoneyWeb. But there was a 14% increase in costs. High “labour and electricity costs ate into margins”.

The company’s free cash flow amounts to R98 million, reports BDLive. Added to “debt of R165 million raised during the year,” DRD Gold had R377 million of cash on its balance sheet.

So a strong set of results for DRD Gold. We will have to wait and see how the company copes in the first quarter of its financial year.

Earnings grow 11% at DRD Gold
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