DRDGold posts weak earnings as production falls - CNBC Africa

DRDGold posts weak earnings as production falls

Earnings

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DRDGold posts weak earnings as production falls . PHOTOS: Wikipedia/Drdgold.com

For the year ended 30 June 2014, the company reported revenue of 1.8 billion rand, due to a nine per cent drop in gold production at 132,909 ounces (oz), resulting in an eight per cent decline in gold sold at 134,420oz and cash operations costs increasing by 20 per cent at 372,671 rand per kilogram.

Operating profit declined significantly by 62 per cent to 260 million rand while EBITDA was down 60 per cent at 204 million rand.

(READ MORE: DRDGOLD posts 17% rise in operating profit)

[DATA DRD:DRDGold Limited] did however declare a final dividend of two cents per ordinary share for the period.

The group’s total attributable mineral reserves were 12 per cent lower at 1.8 million ounces (Moz) while total attributable mineral resources were down by one per cent at 37.4Moz.

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In a review of the third and fourth quarters of 2014, the group posted that gold production increased by 13 per cent at 34,143oz, reflecting improvements in throughput and average yield.

Gold sold during the quarter was nine per cent higher at 32,857oz while cash operating costs were eight per cent lower at 379,039 per kilogram.

As a result, revenue rose by five per cent quarter on quarter to 447.4 million rand.

DRDGold said that it had focused on cost cutting initiatives during the 2014 financial period, resulting in a 220 million rand disposal of its underground mining and prospecting rights held by East Rand Proprietary Mines Limited.

The group has also reduced its executive and senior management board by 26 per cent, which translates into a 12 million rand saving per year.

(READ MORE: DRDGOLD CFO resigns)

Looking ahead, DRDGold said that it will be focusing on extending the reach of its metallurgical plant Ergo Mining Limited, either through cooperation or acquisition.

(WATCH VIDEO: DRDGold proposes acquisition of remaining)

Also, test work on its flotation and fine-grind (FFG) circuits  will continue until the end of the second quarter of 2015 in order to ensure that full capacity is reached a its High and Low Grade Sections.

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