DRDGOLD revenue increases by 26% in FY2021
In its trading statement and trading update for the year ended 30 June 2021, DRDGOLD reports revenue increased by R1,084.0 million, or 26%, to R5,269.0 million (2020: R4,185.0 million).
Ergo Mining revenue increased by R878.7 million, or 29%, to R3,943.0 million (2020: R3,064.3 million), due mainly to a 20% increase in the Rand gold price received as well as a 7% increase in gold sold. Volume throughput increased by 13% to mitigate a 6% decrease in yield due mainly to the previously reported depletion of high-grade reserves available to the Knights plant.
Far West Gold Recoveries revenue increased by R205.3 million, or 18%, to R1,326.0 million (2020: R1,120.7 million) due mainly to a 18% increase in the Rand gold price received as well as a 1% increase in gold sold. Volume throughput increased by 2% as yield remained stable at 0.237g/t.
The impact of the increase in revenue on earnings and headline earnings was moderated by an increase in cash operating costs of R446.7 million, or 17%, to R3,072.7 million (2020: R2,626.0 million).
At Ergo, cash operating costs increased by R392.5 million, or 17%, to R2,666.5 million (2020: R2,274.0 million) due to the 13% increase in volume throughput, an increase in the use of reagents and a 15% increase in the cost of power in April 2021.
At FWGR, cash operating costs increased by R54.2 million, or 15%, to R406.2 million (2020: R352.0 million) mostly as a result of increased costs associated with milling, which was not operational for the whole of the previous corresponding period.
As at 30 June 2021, DRDGOLD’s cash and cash equivalents was R2,180.0 million (30 June 2020: R1,715.1 million), with a revolving credit facility with ABSA Bank Limited of R200 million, available if needed. During the year ended 30 June 2021, DRDGOLD generated free cash flow (cash inflow from operating activities less cash outflow from investing activities) of R1.1 billion. The Group remains free of any bank debt as at 30 June 2021 (30 June 2020: Rnil).
