DRDGOLD: Poor production performance amid weaker gold price

DRDGOLD’s shares took battering on the JSE after it reported a decline in third-quarter production and said earnings came under pressure as it also received less for the metal it sold.

In an operating update, the mine tailings retreatment specialist said gold production for the three months to 31 March decreased by 6% from the previous quarter to 1,382 kg. That was primarily due to a 9% decrease in yield despite a 3% increase in tonnage throughput. It sold 8% less gold while an increase in sustaining capital expenditure resulted in a rise in all-in sustaining costs.

Earnings before interest, tax, depreciation, and amortisation (Ebitda) decreased by 35% from the previous quarter to R372-million, primarily due to the decrease in gold sold and a 9% decline in the average rand gold price received for the quarter.

Cash and cash equivalents decreased by R3.7-million to R2.17-billion after paying an interim cash dividend of R342-million. It still has no external borrowings and said cash generated during the quarter would be applied towards its extended capital expenditure programme.

“Despite the capital expenditure planned for the year, the Company remains in a favourable position to, in the absence of unforeseen events, consider declaring a final cash dividend in or around August 2021,” DRDGOLD said.

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