• Revenue: Increased by 28% to just over ZAR 3.8 billion.
• Operating Profit: Increased by 74% to ZAR 1.5 billion.
• Headline Earnings: Increased by 65% to just under ZAR 1 billion.
• Cash Position: Healthy cash position just north of ZAR 600 million.
• Dividend: Declared a 50% increase on the previous interim dividend, up from ZAR 0.20 to ZAR 0.30 per share.
• Ergo Volume Throughput: Increased to 1.65 million tons per month.
• Electricity Usage: 16% decrease in electricity from external sources.
• Far West Gold Operations Production: Increased to 2.5 tons for the half-year period.
• Operating Margin: Improved significantly due to controlled costs and higher gold prices.
• Free Cash Flow: Generated despite a large CapEx program.
• Cash Generated from Operations: More than doubled to over ZAR 1.2 billion.
• Cash Capital Expenditure: ZAR 947 million for the period.
• Net Income: ZAR 970.1 million, up 65% period on period.

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Release Date: February 18, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• DRDGold Ltd (NYSE:DRD) reported a 28% increase in revenue to over ZAR 3.8 billion, driven by a healthy gold price and steady production.
• Operating profit surged by 74% to ZAR 1.5 billion, with headline earnings increasing by 65% to just under a billion rand.
• The company declared a 50% increase in its interim dividend, from ZAR 0.20 to ZAR 0.30 per share, marking the 18th consecutive year of dividend payments.
• DRDGold Ltd (NYSE:DRD) successfully commissioned a 60-megawatt solar farm, reducing electricity consumption from external sources by 16%.
• The company maintained a strong cash position of over ZAR 600 million, without needing to utilize its credit facility.

Negative Points

• The Ergo operation is experiencing a shift to lower grade sites, resulting in slightly reduced yields, although this is offset by lower cost per ton.
• There was a slight increase in potable water consumption, despite efforts to reduce it over the years.
• The company faces challenges with the reconciliation of power units evacuated into the grid, affecting the clarity of cost savings from the solar farm.
• DRDGold Ltd (NYSE:DRD) is throttling back throughput rates at Ergo due to mature tailings deposition capacity, impacting production volumes.
• The company anticipates falling short of its ZAR 3.5 billion CapEx guidance for the 2025 financial year, although it remains on track with long-term project execution.

Q & A Highlights

Q: Can you provide details on the terms of the ZAR 2 billion Netbank facility? A: The facility includes a ZAR 500 million overdraft available anytime and a secured ZAR 1 billion revolving credit facility over five years, with a ZAR 500 million accordion option. This totals a ZAR 2 billion facility with Netbank. - Riaan Davel, CFO

Q: Is the current tax rate still applicable given the improved H2 outlook? A: We increased the deferred tax rate for Ergo from 22% to 25% last year, reflecting future profitability. We haven't updated the rates since, as our previous estimates still stand. - Riaan Davel, CFO

Q: Will the CapEx guidance of ZAR 3.5 billion for FY25 be achieved? A: It's unlikely we'll spend the full ZAR 3.5 billion, but the extent of the shortfall isn't clear yet. However, we are trending favorably in terms of execution towards our long-term vision. - Daniel Pretorius, CEO

Q: What are the realized savings from the solar farm on a per ton basis at Ergo? A: We haven't prepared detailed numbers for this period, but we are trending within our estimated ranges. We plan to provide a detailed breakdown of savings in a future webinar. - Daniel Pretorius, CEO

Q: How should we think about the grades at Ergo? Is this a step change or an anomaly? A: It's a step change. Ergo's profile is now higher volume but lower grade, aiming for economies of scale with lower cost per ton to offset the lower yields. - Daniel Pretorius, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.