DRDGOLD (US:DRD)2025-10-30 12:21Financial Performance - Revenue increased by 26% to R7,878.2 million in fiscal year 2025 from R6,239.7 million in fiscal year 2024, primarily due to a 31% increase in the average rand gold price received to R1,632,275 per kilogram [393]. - Gold revenue increased by R1,634.6 million, or 26%, to R7,864.3 million in fiscal year 2025, driven by a 31% increase in average rand gold price to R1,632,275 per kilogram, despite a decrease in gold sold from 160,400 ounces to 154,902 ounces [417]. - Cash generated from operating activities amounted to R3,511.1 million for fiscal year 2025, a significant increase from R1,845.2 million in fiscal year 2024 [442]. - Adjusted EBITDA for fiscal year 2025 was R3,317.6 million, up from R1,884.9 million in fiscal year 2024, indicating significant operational improvement [431]. - Income tax charge increased to R824.4 million in fiscal year 2025 from R488.2 million in fiscal year 2024, with a deferred tax charge of R824.4 million [426]. Production and Costs - Gold production decreased to 155,288 ounces in fiscal year 2025 from 160,818 ounces in fiscal year 2024, with gold sold also decreasing from 160,400 ounces to 154,902 ounces [392]. - Cash operating costs per kilogram increased to R903,824 in fiscal year 2025 from R833,536 in fiscal year 2024, reflecting rising operational costs [392]. - Cost of sales amounted to R4,747.7 million in fiscal year 2025, with operating costs increasing by 5% to R4,404.6 million, primarily due to inflation and higher reagent and consumable costs [418]. - Consolidated cash operating costs per kilogram increased by 8% to R903,824 per kilogram in fiscal year 2025, while all-in sustaining costs per kilogram rose by 6% to R1,001,214 [433]. - Cash operating costs for fiscal year 2025 increased by R179.4 million to R4,372.7 million compared to R4,193.3 million in fiscal year 2024 [440]. Capital Expenditure - Capital expenditure decreased by R913.9 million to R2,200.0 million in fiscal year 2025 from R3,113.9 million in fiscal year 2024, mainly due to prior year expenditures on the solar plant [395]. - Non-sustaining capital expenditure decreased significantly from R2,789.1 million in fiscal year 2024 to R1,899.4 million in fiscal year 2025, primarily related to the solar power plant construction [435]. - Total capital growth investment forecast for the medium term is around R7.8 billion, primarily for the FWGR Phase 2 project and Daggafontein TSF pipeline construction [451]. Regulatory and Environmental Factors - The company faces regulatory challenges in South Africa, impacting the execution of key capital projects due to slow turnaround in obtaining permits and approvals [390]. - Future environmental rehabilitation costs are estimated based on current prices and regulatory requirements, impacting financial performance [406]. - The total environmental rehabilitation provision decreased to R558.7 million as of June 30, 2025, from R616.8 million in 2024, reflecting a R98.0 million decrease in the provision recognized in profit or loss [420]. Governance and Remuneration - The company secretary was appointed on October 25, 2023, indicating a recent change in governance [491]. - The total directors' remuneration for the year ended June 30, 2025, was R42.6 million [493]. - The total compensation for executive directors amounted to R35.296 million for the year ended June 30, 2025 [497]. - The Remuneration Committee ensures fair and responsible remuneration for directors and executive management, evaluating performance in relation to reward [546]. - The company has established a Nominations Committee to oversee the selection of director nominees, ensuring a majority of independent directors [527]. Employee and Safety Metrics - As of June 30, 2025, the total number of employees is 3,410, comprising 2,517 specialized service providers and 893 directly employed staff [563]. - The number of employees increased from 2,956 in June 2024 to 3,410 in June 2025, representing a growth of approximately 15.3% [563]. - Approximately 80% of Ergo employees and 75% of FWGR employees are members of trade unions or employee associations, indicating strong union representation [568]. - Safety measures are a priority, with ongoing efforts to create a safe working environment for employees [571]. - The lost time injury frequency rate (LTIFR) for Ergo increased to 1.72 in fiscal 2025 from 1.18 in fiscal 2024, while FWGR's LTIFR rose to 1.23 from 0.92 [571]. Shareholder and Incentive Plans - The company awarded 436,959 conditional shares in October 2023 as part of the new incentive plan, with additional awards scheduled for subsequent years [521]. - The Single Incentive Plan aims to balance financial and non-financial performance measures, recognizing the challenges of setting realistic targets in a volatile economic environment [512]. - The payout structure consists of 67% cash payment and 33% in deferred DRDGOLD shares, with vesting periods of 5 years for certain categories of employees [514]. - The performance shares under the ELTI scheme vest based on total shareholder return (TSR) against a hurdle rate of 15% [582]. - The company aims to enhance board diversity and reflect South Africa's demographics through recent changes in board composition [570].