Media releases

Production exceeds guidance

Details

Published: Wednesday, 17 August 2022 08:01

Johannesburg, South Africa. 17 August 2022. DRDGOLD Limited (JSE: DRD, NYSE: DRD) in a trading statement and update released today, reported gold production of 183 902 ounces at a cash operating cost of R600 875/kg, with a capital investment of R584.1 million for the year ended 30 June 2022 (FY2022).

Production was comfortably over the upper end of guidance provided for FY2022 of between 160 000 and 180 000 ounces, while cash operating cost was slightly over the R600 000/kg anticipated and capital investment slightly under the R600 million anticipated.

Consequently, the company expects to announce on or about 24 August 2022:

• Earnings per share (EPS) of between 114.4 cents and 148.0 cents compared to 168.4 cents for FY2021, a decrease of between 32% and 12%
• Headline earnings per share (HEPS) of between 113.6 cents and 147.2 cents compared to 168.4 cents for FY2021, a decrease of between 33% and 13%

The expected decreases in EPS and HEPS are due mainly to movements in the following:

Revenue

A decrease of R150.5 million (3%) to R5 118.5 million (FY2021: R5 269.0 million).

Revenue from the company’s Ergo operation decreased by R238.1 million (6%) to R3 704.9 million (FY2021: R3 943.0 million), due mainly to a 3% decrease in the Rand gold price received and a 3% decrease in gold sold. The decrease in gold sold resulted from a 4% decrease in volume throughput, offset by a 1% increase in yield.

Revenue from the company’s Far West Gold Recoveries (FWGR) operation increased by R87.6 million (7%) to R1 413.6 million (FY2021: R1 326.0 million) due mainly to a 9% increase in gold sold. The increase in gold sold resulted from an 8% increase in yield, notwithstanding volume throughput decreasing by 1%.

Cash operating costs

The effect of the decrease in revenue on earnings and headline earnings was further impacted by an increase in cash operating costs of R391.1 million (13%) to R3 463.8 million (FY2021: R3 072.7 million).

The increases in costs at both operations were mainly caused by above-inflation increases in the costs of key consumables, diesel, steel and cyanide.

At Ergo, cash operating costs increased by R343.3 million (13%) to R3 009.8 million (FY2021: R2 666.5 million).

At FWGR, cash operating costs increased by R47.8 million (12%) to R454.0 million (FY2021: R406.2 million).

Liquidity

At 30 June 2022, cash and cash equivalents were R2 525.6 million (FY2021: R2 180.0 million), with a revolving credit facility with ABSA Bank Limited of R200 million, available if needed. During the current reporting period, DRDGOLD generated free cash flow (cash inflow from operating activities less cash outflow from investing activities) of R871.6 million and paid cash dividends of R513.3 million. The Group remains free of any bank debt as at 30 June 2022 (FY2021: Rnil).

The financial information contained in this announcement is the responsibility of the directors of DRDGOLD, and such information has not been reviewed or reported on by the Company’s auditors.

The condensed consolidated reviewed provisional results for the year ended 30 June 2022 are expected to be published on or around 24 August 2022.

Investor and media relations queries:

R&A Strategic Communications
Jane Kamau
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