DRDGold hits the wall in its third quarter
Ebitda slumps by a third on a weaker gold price and lower sales, overshadowing a stellar first half
SA’s leading gold tailings retreatment specialist DRDGold said its third quarter financials took a hit from lower gold production and prices, tempering what had been a promising year, but it remained committed to paying a final dividend.
DRDGold paid an interim dividend of 40c a share and its board remained confident it would continue its run of final dividends that remained unbroken for 14 years, the company said on Wednesday.
DRDGold is cash flush and debt free, with R2.17bn on its balance sheet. It paid R342m out in the interim dividend.
The company, which is majority owned by Sibanye-Stillwater, has tailings operations to the east and west of Johannesburg and it is in a capital expenditure phase as it expands output at the western plant.
“Even with this planned capital expenditure, and unless an unforeseen event takes place, the company anticipates declaring a final dividend in August 2021, to maintain its 14-year unbroken run of dividends paid,” it said.
DRDGold’s earnings before interest, tax, depreciation and amortisation (ebitda) fell 35% in the quarter to end-March compared to the December quarter.
Gold sales dropped 8% and the rand gold price retreated 9% to R857,895/kg, pushing ebitda to R372m.
In the first six months of its 2021 financial year, DRDGold benefited from a 42% increase in the gold price to just shy of R1m/kg. Its adjusted ebitda for the period was R1.34bn compared with R656m the year before.
In the March quarter, the third of its financial year, DRDGold said its yield from the more than 2-million tonnes of tailings it processes each month fell to 0.19g/tonne from nearly 0.21g the previous quarter.
DRDGold milled 3% more tonnes than the previous quarter to offset the drop in grade.
The all-in sustaining cost of production increased to R645.488/kg as DRDGold spent more on sustaining its business.
In the previous six months, all in sustaining costs were nearly R598,000/kg.
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