South Africa's DRDGOLD anticipates earnings to double in 2021
(Kitco News) - DRDGOLD (JSE, NYSE: DRD), a South African gold producer and a world leader in the recovery of gold from the retreatment of surface tailings, announced today that it expects earnings per share ("EPS") and headline earnings per share ("HEPS") of between 160.1 cents and 176.5 cents for the year ended 30 June 2021 compared to EPS and HEPS of 82.5 cents and 82.4 cents for the year ended 30 June 2020, respectively, being an increase of between 94% and 114%.
The company said that expected increases in EPS and HEPS for the current reporting period compared to the previous corresponding period are due mainly to revenue increase by 26% to R5,269.0 million (2020: R4,185.0 million), which 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).
Ergo Mining's 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.
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 and paid cash dividends of R640.9 million. The group said it remains free of any bank debt as at 30 June 2021 (30 June 2020: Rnil).