DRDGOLD Limited recently released its operating update for the quarter ended March 31, 2024. This article provides a comprehensive analysis of the key metrics and developments highlighted in the update, offering insights into the company’s performance and outlook for investors and stakeholders.
Production and Sales Performance
DRDGOLD’s production and sales figures for Q1 2024 exhibited both positive and challenging trends. Gold production decreased by 3%, amounting to 1,227 kilograms compared to the previous quarter. Similarly, gold sold saw a 4% decline, with 1,218 kilograms sold during the same period. These reductions can be attributed to various operational factors impacting throughput and output.
| Metric | Q1 2024 | Q4 2023 | Change |
|---|---|---|---|
| Gold Produced (kg) | 1,227 | 1,263 | -3% |
| Gold Sold (kg) | 1,218 | 1,268 | -4% |
| Ore Milled (000’t) | 5,330 | 5,533 | -4% |
Price and Cost Analysis
Despite the decline in production and sales volumes, DRDGOLD experienced a favourable uptick in the average gold price received. The company received R1,256,579 per kilogram, marking a 5% increase from the previous quarter. This uptrend in gold prices positively impacted the company’s Adjusted EBITDA, which surged by 12% to R494.5 million.
| Metric | Q1 2024 | Q4 2023 | Change |
|---|---|---|---|
| Average Gold Price (R per kg) | 1,256,579 | 1,191,703 | 5% |
| Adjusted EBITDA (Rm) | 494.5 | 441.1 | 12% |
| Cash Operating Costs (R per kg) | 816,042 | 803,459 | 2% |
| All-in Sustaining Costs (R per kg) | 912,695 | 940,794 | -3% |
| All-in Costs (R per kg) | 1,190,070 | 1,157,311 | 3% |
Capital Expenditure and Financial Position
DRDGOLD’s capital expenditure profile witnessed notable changes in Q1 2024. Sustaining capital expenditure decreased significantly by 54%, totalling R50.5 million, while non-sustaining/growth capital expenditure rose by 23% to R334.3 million. These shifts reflect the company’s strategic focus on optimizing costs and investing in growth opportunities.
| Capital Expenditure (Rm) | Q1 2024 | Q4 2023 | Change |
|---|---|---|---|
| Sustaining | 50.5 | 108.7 | -54% |
| Non-sustaining/Growth | 334.3 | 271.4 | 23% |
Dividend and Cash Position
DRDGOLD’s commitment to shareholders is evident through its interim cash dividend payment of R172.3 million for the six months ended December 31, 2023. As of March 31, 2024, the company’s cash and cash equivalents stood at R1,585.5 million, reflecting an increase of R56.1 million from the previous period. This healthy cash position provides the company with financial flexibility for its extended capital expenditure program.
Outlook and Conclusion
Looking ahead, DRDGOLD remains cautiously optimistic about its performance for the remainder of the financial year ending June 30, 2024. While production may marginally fall short of the initial guidance range of 165,000 to 175,000 ounces due to operational challenges, the company’s strong finish in March and positive production trends are encouraging. The potential to declare a final cash dividend in August 2024 highlights the company’s confidence in its financial stability and operational resilience.
