DRDGOLD Limited has reported full-year 2021 earnings more than double those reported in 2020 and declared a higher final dividend of 40 rand cents per share as it benefitted from a higher rand gold price and managed increases in working costs.
The South Africa-focused mine tailings retreatment specialist is majority-owned by Sibanye-Stillwater, the major platinum group metals (PGMs) and gold producer. It operates the Ergo Mining Operations (EMO) business on the eastern Witwatersrand, and also the Far West Gold Recoveries (FWGR) project.
DRDGOLD's operating profit increased by 39% to 2.2 billion rand ($146 million) for the year to June 30, 2021, as it also increased total gold production by 6% to 5,723 kilograms (kg), reflecting an 11% improvement in throughput.
READ: DRDGOLD says its Ergo Mining subsidiary has begun reclamation of the 2.7 million ton 4L25 mine dump
Group cash operating unit costs were 12% higher at 540 338 tand per kg ($35,927 per kg) due to a decrease in yield at Ergo, a 15% tariff increase by power utility Eskom which came into effect in April 2021, and the first full year of milling at FWGR.
Earnings per share were 104% higher at 168.4 rand cents ($0.11) compared with 82.4 rand cents ($0.06) in the comparative period.
“Importantly, with a view to the future, we were also able to initiate – and in some cases complete – important capital projects at both of our operations,” DRDGOLD CEO Niël Pretorius said in a statement.
“All of these are intended to help us do more of what we do, better. We have begun, and will continue in the months ahead, to report regularly to stakeholders on our various improvement initiatives,” he added.
The company has guided for fiscal 2022 production of between 160,000 ounces (oz) and 180,000 oz at a cash operating unit cost of approximately R600,000/kg ($39,894/kg) and a capital investment of approximately R600 million ($39.9 million).
The company achieved 99% of the upper limit of its 2020 production guidance and exceeded its cash operating cost guidance of R535 000/kg by just 1%. At year-end, the company remained debt-free.
The final dividend payment was an increase on full-year 2020's 35 rand cents payout. The company noted that it is the 14th consecutive financial year of DRDGOLD declaring dividends.
Contact the author at stephen.gunnion@proactiveinvestors.com