DRDGold reports increased revenues as gold prices soar despite production dip
DRDGold said that as a result of the reduction in gold production, cash operating costs per kilogram of gold sold increased by 10% from the previous quarter to R964 235/kg.
Image: Supplied
Tawanda Karombo
A 10% surge in average gold price boosted DRDGold's revenues for the quarter ending 31 March by 4% despite a dip in gold produced and sold during the period.
Gold prices for the quarter averaged R1 685 760 per kilogram, representing a 10% surge compared to the previous quarter ended December 2024.
Revenue for the quarter subsequently firmed up by 4% compared to the previous quarter to about R1.8 billion amid gold sold for the period declining by 169kg to 1 109kg.
Adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) decreased by 2% from the previous quarter to R761.7 million.
'Gold sold and produced decreased by 13% and 12% respectively, due to a 5% decrease in tonnage throughput and a 7% decrease in yield to 0.181g/t,' said DRDGold on Wednesday.
'Tonnages decreased mainly due to unprecedented wet weather conditions, which inhibited access to certain sites and consequently impacted the desired blend of reclamation material.'
The wet weather conditions experienced for the period also affected average yields achieved for the period. Yields for the quarter to end March 31 fell by 7% to 0.181g/t.
DRDGold, however, said cash operating costs remained under control, decreasing to R1 044.2 million, leaving it with cash and cash equivalents of R950.5m as at the end of the reporting period.
It said that as a result of the reduction in gold production, cash operating costs per kilogram of gold sold increased by 10% from the previous quarter to R964 235/kg.
Cash operating costs per tonne subsequently increased by 5% to R175/t as a result of the decrease in ore milled quarter on quarter.
All-in sustaining costs per kilogram for the period amounted to R1 074 493/kg, increasing by 8% quarter-on-quarter mainly due to the decrease in gold production and sustaining capital expenditure.
DRDGold paid an interim cash dividend of R258.7m for the six months ended 31 December 2024 during the quarter period under review.
It said cash generated during the current quarter will be applied towards the company's extended capital expenditure programme.
'This coupled with the recent surge in the gold price and barring any unforeseen events, places the Company in a favourable position to consider declaring a final dividend in August 2025,' it said.
However, DRDGold has had to review downwards its production targets for the year to June 2025 despite indicating in January that it remained on track to achieve the production guidance for the financial year ending 30 June 2025 of between 155 000 ounces and 165 000 ounces.
'Due to the decrease in tonnages and decrease in yield that has been observed during the quarter ended 31 March 2025, the company may fall marginally short of its production guidance,' said DRDGold.
'As a result of the expected decrease in gold production, the company may exceed the revised cash operating unit cost guidance of R870 000/kg as published in the HY1 FY2025.'
Despite this, DRDGold said it continued to explore further renewable energy initiatives in line with its commitment to sustainability as well as investing in capital infrastructure developments that underscore its throughput and output targets under its Vision 2028 strategy.
For the half year period to December 2024, interim headline earnings in DRDGold grew 65% to R970.1m, equating to 112.6 cents in headline earnings per share.
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