DRDGold posts sharp fall in interim profits
Company says increased operating costs, retrenchment payments, a higher salary bill, and increased electricity and water costs contributed to the decline
DRDGold posted a sharp fall in interim profits after closing a number of sites, laying off staff and depreciating its assets.
DRDGold, which treats tailings dumps around Johannesburg to extract residual gold, reported a 5% increase in revenue to R1.19bn for the six months to end-December as the rand gold price increased by 16% to R572,443/kg compared with the year-earlier period.
Gross operating profit fell to R35m from R64m, with increased operating costs, R18m in retrenchment payments and R102m in depreciation the causes. A higher salary bill stemming from an average 8.5% increase in wages as well as higher electricity and water costs contributed to the decline.
Profit fell to R2.7m from R18m and DRDGold reported a headline loss of R10.2m, or 2.4c a share, compared with headline earnings of R10.9m, or 2.6c per share, a year ago.
Gold output fell 7% to 2,100kg because of lower throughput and a 6% drop in yield to 0.166g/tonne.
DRDGold said it had commissioned two new sites containing 12-million tonnes and 7-million tonnes of material with grades of 0.3g/tonne and 0.28g/tonne, respectively.
It was assessing two other slimes dams to decide which one to prioritise.
"These new reclamation sites, together with the phasing out of the West Rand, are expected to enhance consistency in volume delivery and will obviously also come in at a much lower unit cost to reclaim than the West Rand clean-up sites," the company said.