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Published: Thursday, 06 February 2025 08:40

Group revenue increases by 28%

Johannesburg, South Africa. 06 February 2025. DRDGOLD Limited (JSE: DRD, A2X, NYSE: DRD) expects to announce earnings per share (EPS) and headline earnings per share (HEPS) of between 109.2 cents and 116.0 cents compared to EPS and HEPS of 68.4 cents for H1 FY2024, an increase of between 60% and 70%. It also reported an estimated 28% increase in revenue for the six months ended 31 December 2024 (H1 FY2025) of R3 802.3 million compared to R2 974.2 million in H1 FY2024.

The Company is in the process of finalising its results for HY1 FY2025 which are expected to be published on SENS on or about 18 February 2025.

Revenue

At Far West Gold Recoveries  Proprietary Limited (FWGR) revenue increased by R302.1 million to R1 083.3 million (H1 FY2024: R781.2 million) mainly due to a 26% increase in the Rand gold price received and a 10% increase in gold sold to 731kg (H1 FY2024: 663kg). The increase in gold sold was mainly due to a 9% increase in yield from 0.215g/t in H1 FY2024 to 0.235g/t. Throughput tonnages remained consistent at 3.1Mt.

At Ergo Mining Proprietary Limited (Ergo)  revenue increased by R526.0 million to R2 719.0 million (H1 FY2024: R2 193.0 million) as a result of the 26% increase in the Rand gold price. Throughput tonnages increased by 22% from 8.1Mt in H1 FY2024 to 9.9Mt as a result of the successful commissioning and ramp-up of production from the 4L3, 4L14, and 5L27 dumps that started early in the 2024 calendar year, which by and large offset the effect of a reduction in yield from 0.233g/t to 0.187g/t due to lower average grades from the newly commissioned sites. Gold sold decreased by 2% from 1 872kg in H1 FY2024 to 1 836kg.

Cash operating costs

Group cash operating costs for the period increased by 6% to R2 215.1 million (H1 FY2024: R2 097.1 million).

At Ergo, cash operating costs increased by R94.4 million (5%) to R1 886.4 million (H1 FY2024: R1 792.0 million) driven by inflationary increases, higher reagent and consumable stores consumption and increased security costs. Costs benefited from a decrease in machine hire costs as mechanical reclamation of clean-up sites is systematically reducing. The supply of power from Ergo’s 60MW solar plant limited the increase in electricity costs to only 3%, despite higher electricity consumption due to the 22% increase in tonnage throughput.

With the solar plant and battery energy storage system (BESS) reaching practical commissioning in November 2024 and now fully integrated into the national grid, a key focus for the remainder of FY2025  will be to optimise its contribution to the Group's cost base through direct consumption and off-setting at Ergo, and wheeling to FWGR.

At FWGR, cash operating costs increased by R23.6 million (8%) to R328.7 million (H1 FY2024: R305.1 million) due to inflation and in particular, higher than inflation increases in security and labour costs.

 Operational performance outlook

On 21 August 2024, the Company issued production guidance for the year ended 30 June 2025 (FY2025) of between 155 000 ounces and 165 000 ounces of gold and cash operating costs at approximately R870 000/kg, which it remains on track to achieve.

 Capital expenditure

Cash expenditure on capital projects decreased by R127.1 million (12%) to R947.6 million (H1 FY2024: R1 074.7 million). The marginal decrease was mainly due to the practical completion of key projects, such as commissioning of reclamation sites and the solar plant and BESS at Ergo, for which there was significant capital expenditure (capex) in H1 FY2024. The H1 FY2025 capex was mainly driven by ongoing key projects at FWGR such as the Regional Tailings Storage Facility (RTSF) construction, the Driefontein 2 Plant expansion and related pipeline infrastructure as well as the completion costs of the solar power plant and BESS at Ergo.

 Liquidity

As at 31 December 2024, DRDGOLD held R661.2 million in cash and cash equivalents compared to R1 529.4 million as at 31 December 2023. During H1 FY2025, DRDGOLD had free cash inflow (cash from operating activities less cash outflow from investing activities) of R318.9 million (H1 FY2024: free cash outflow of R370.8 million).  Cash outflow from investing activities reduced by R143.2 million to R964.0 million compared to R1 107.2 million in H1 FY2024 and cash dividend of R172.3 million was paid, compared to R559.4 million in H1 FY2024.

The Group remains free of any bank debt as at 31 December 2024 (30 June 2024: Rnil). To support liquidity in funding the significant capital expansion programme the Group has secured a R1 billion revolving credit facility with a R500 million accordion option and a R500 million general bank facility with Nedbank against which it may draw as needed. These facilities remained undrawn at 31 December 2024.

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

Investor and media relations queries:
R&A Strategic Communications
Jane Kamau
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