DRDGOLD (US:DRD)2022-02-16 13:55Financial Data and Key Metrics Changes - Revenue for the six months ending December 2021 was just under R2.5 billion, a decrease of 16% compared to the same period in 2020, primarily due to a 13% drop in gold price and a 4% decrease in gold sold [4][18] - Operating profit was just over R830 million, reflecting a 48% decline period-on-period, driven by increased costs and lower revenue [4][18] - Free cash flow generated was over R400 million, allowing the company to declare an interim dividend for the 15th consecutive year [7][18] Business Line Data and Key Metrics Changes - For the Ergo operation, gold sold decreased by 9%, contributing to a 20% decrease in revenue, with cash operating costs increasing by 12% [15][16] - Far West Gold showed a solid performance with gold sold up by 13%, despite the overall gold price decline, indicating stable throughput and improved yield [16][17] Market Data and Key Metrics Changes - The average gold price for the six months was R863,000 per kilogram, down from R988,000 in the previous year [4][14] - The company maintained a sustaining cost margin of approximately 3%, despite rising operational costs [6][18] Company Strategy and Development Direction - The company aims to integrate environmental sustainability into its operations, focusing on long-term mining strategies that allow for environmental cleanup and sustainable land use [12][34] - There is a commitment to optimizing capital expenditure, with R600 million planned for capital projects aimed at enhancing operational efficiency and environmental management [13][22] Management's Comments on Operating Environment and Future Outlook - Management expressed satisfaction with operational performance despite challenges such as electricity supply disruptions and adverse weather conditions [3][4] - The outlook remains positive, with production trends showing improvement and a focus on maintaining cash flow and dividend payments [7][46] Other Important Information - The company reported a slight decrease in dust exceedances, indicating improved environmental performance [8] - Significant investments are being made in social and economic development, with just under $20 million spent in this area [7][41] Q&A Session Summary Question: What are the expectations regarding gold price fluctuations? - Management emphasized the importance of maintaining full exposure to gold price dynamics, allowing for potential upside while managing costs effectively [25][26] Question: How is the company addressing rising operational costs? - The company is closely monitoring cost pressures, particularly in reagents and electricity, and is committed to managing these costs while maintaining operational efficiency [15][16] Question: What is the company's approach to environmental sustainability? - The company is focused on zero-waste operations, utilizing recycled water and planning to increase reliance on solar power to reduce its carbon footprint [32][34]