Turning sunlight into gold
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DRDGold Ltd (DRD) (H1 2025) Earnings Call Highlights: Record Profits and Dividend Boost Amid ...
February 19, 2025 3 min read
- Revenue: Increased by 28% to just over ZAR 3.8 billion.
- Operating Profit: Increased by 74% to ZAR 1.5 billion.
- Headline Earnings: Increased by 65% to just under ZAR 1 billion.
- Cash Position: Healthy cash position just north of ZAR 600 million.
- Dividend: Declared a 50% increase on the previous interim dividend, up from ZAR 0.20 to ZAR 0.30 per share.
- Ergo Volume Throughput: Increased to 1.65 million tons per month.
- Electricity Usage: 16% decrease in electricity from external sources.
- Far West Gold Operations Production:Increased to 2.5 tons for the half-year period.
- Operating Margin: Improved significantly due to controlled costs and higher gold prices.
- Free Cash Flow: Generated despite a large CapEx program.
- Cash Generated from Operations: More than doubled to over ZAR 1.2 billion.
- Cash Capital Expenditure: ZAR 947 million for the period.
- Net Income: ZAR 970.1 million, up 65% period on period.
Release Date: February 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points- DRDGold Ltd ( NYSE:DRD) reported a 28% increase in revenue to over ZAR 3.8 billion, driven by a healthy gold price and steady production.
- Operating profit surged by 74% to ZAR 1.5 billion, with headline earnings increasing by 65% to just under a billion rand.
- The company declared a 50% increase in its interim dividend, from ZAR 0.20 to ZAR 0.30 per share, marking the 18th consecutive year of dividend payments.
- DRDGold Ltd ( NYSE:DRD) successfully commissioned a 60-megawatt solar farm, reducing electricity consumption from external sources by 16%.
- The company maintained a strong cash position of over ZAR 600 million, without needing to utilize its credit facility.
Negative Points- The Ergo operation is experiencing a shift to lower grade sites, resulting in slightly reduced yields, although this is offset by lower cost per ton.
- There was a slight increase in potable water consumption, despite efforts to reduce it over the years.
- The company faces challenges with the reconciliation of power units evacuated into the grid, affecting the clarity of cost savings from the solar farm.
- DRDGold Ltd ( NYSE:DRD) is throttling back throughput rates at Ergo due to mature tailings deposition capacity, impacting production volumes.
- The company anticipates falling short of its ZAR 3.5 billion CapEx guidance for the 2025 financial year, although it remains on track with long-term project execution.
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