DRDGOLD (US:DRD)2022-08-24 16:24Financial Data and Key Metrics Changes - Revenue decreased by 3% year-on-year, primarily due to a decline in gold prices and a reduction in gold sold [32][43] - Operating profit was R1.7 billion, down by just over 20% compared to the previous year [13] - Headline earnings also fell by 22% year-on-year, totaling R1.1 billion [42][47] - Cash operating costs increased by approximately 13% year-on-year, reflecting cost pressures from key consumables [33][36] - Free cash flow decreased to R871.6 million from R1.1 billion in the previous year [41] Business Line Data and Key Metrics Changes - Ergo Operations: Revenue down by 6% year-on-year, with a 3% decrease in the average rand gold price received and a 3% reduction in gold sold [32] - Far West Gold Operations: Showed a year-on-year improvement in gold revenue of 7%, with gold sold up by 9% and an 8% increase in yield [35] - Overall, production remained relatively flat across both operations, with challenges in volume throughput due to weather and electricity interruptions [18][26] Market Data and Key Metrics Changes - The gold price experienced a decline of approximately 3% year-on-year, impacting overall revenue and operating margins [37] - Operating margin decreased by 20% year-on-year, attributed to rising costs and lower gold prices [37] Company Strategy and Development Direction - The company is focused on sustainable development and ESG initiatives, emphasizing the importance of environmental management and community support [58][80] - Future capital expenditures are expected to be R1.4 billion, with significant investments in solar energy projects and tailings management [99][100] - The company aims to maintain a stable production range of 160,000 to 180,000 ounces, depending on volume throughput [97] Management's Comments on Operating Environment and Future Outlook - Management highlighted the challenges posed by economic uncertainty, inflation, and local disruptions, including load shedding and social unrest [4][6][9] - Despite these challenges, management expressed optimism about the company's resilience and commitment to investing in operations for long-term growth [96][101] - The company is actively seeking opportunities for growth and expansion while managing risks associated with the operating environment [46][98] Other Important Information - The company has maintained a healthy dividend payout, with a total dividend of R0.60 for the year [41][56] - Significant investments in socio-economic development amounting to R52.9 million were reported, reflecting the company's commitment to community welfare [16][80] Q&A Session Summary Question: What is the outlook for same business CapEx over the next three years? - The company plans to focus on opening new pump stations and dumps for retreatment, with significant investments expected from next year onwards [104][106] Question: Are there plans for self-generation of power? - Currently, the company is exploring options for wheeling and drawing power from Eskom substations but does not have immediate plans for individual power generation [109] Question: What is the status of legal issues at Ergo and Withok? - There are no significant legal issues at Ergo, but a new water usage license application is underway for Withok to expand operations [111][113]