DRDGOLD (DRD) H2 2024 earnings summary

Executive summary

• Revenue increased 14% year-on-year to R6,239.7 million, driven by a strong gold price despite lower volume throughput.

• Operating profit rose 14% to R2,081.3 million, with headline earnings up 4% to R1,327.2 million.

• Gold production declined 5% to 5,002kg due to throughput constraints, but 93% of targeted output was achieved.

• Major capital investment included a 60MW solar farm, 160MW battery storage, and tailings projects to support Vision 2028.

• ESG initiatives advanced, with significant reductions in electricity and water usage and a fatality at Ergo after six years without such incidents.

Financial highlights

• Revenue up 14% year-on-year, gold price up 20%, but gold sold down 5%.

• Operating margin stable at 33.4%, all-in sustaining cost margin at 24%, and cash operating cost at R833,536/kg.

• Free cash flow negative ZAR 1.2 billion due to ZAR 3 billion CapEx, mainly for solar and infrastructure projects.

• Final dividend of 20 SA cents per share declared, marking the 17th consecutive year of dividends.

• Cash and cash equivalents at year-end: R521.5 million.

Outlook and guidance

• Throughput at Ergo and Far West Gold will be throttled until new deposition facilities are commissioned.

• Vision 2028 aims to increase monthly throughput to 3 million tons and annual gold production to 6 tons by FY2028.

• FY2025 gold production guidance set at 155,000–165,000oz, with cash operating cost guidance of R870,000/kg.

• Total CapEx to reach Vision 2028 is over ZAR 10 billion, with ZAR 3 billion already spent and ZAR 7.1 billion to be invested by July 2027.

• Dividend payments will be conservative during the CapEx phase, with capital allocation prioritized over payouts.