In recent months, power utility Eskom has implemented load shedding which has had a negative impact on the economy and businesses in South Africa, including the mining industry. Despite this, DRDGOLD reported profits for the six months ended 31 December 2018.
The company declared a dividend of 25 South African cents per share for the six months ended 31 December 2019, following a six-fold increase in Group operating profit to R719.6 million from the six months ended 31 December 2018.
According to Niël Pretorius, CEO for DRDGOLD key drivers for the improvement were a 33% increase in gold production to 3 037kg, and a 26% rise in the average Rand gold price received to R697 125/kg.
Higher gold production was a consequence both of steady performance from the Group’s Ergo operation and of the first phase of its Far West Gold Recoveries (FWGR) operation reaching full throughput of 500 000tpm.
The latter also contributed the bulk of the Group’s 18% increase in total cash operating costs to R1 377.3 million.
Headline earning of R332.7 million (48.4 SA cents per share) were reported compared with a headline loss of R46.3 million (7.2 SA cents per share) in the previous period.
Reflecting on the impact of load-shedding by power utility Eskom and on an armed robbery at Ergo during the six months under review, Pretorius said, “We look forward to building on the solid performance from both Ergo and FWGR, and to further enhance our resilience to poor service delivery and crime. We are on track to meet the upper range of our FY2020 guidance for the Group and we will work hard to keep up the momentum.”
Looking ahead to the rest of FY2020 and beyond, Pretorius said the company was looking forward to building on the solid performance from both Ergo and FWGR. “We are on track to meet the upper range of our FY2020 guidance for the Group and we will work hard to keep up the momentum. The work we have put in over the years in terms of social and natural value-add now stand us in good stead in developing our narrative in terms of the heightened awareness of ESG,” he said.