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.