DRDGF - DRDGOLD Limited (DRD) Q2 2024 Earnings Call Transcript
2024-02-14 23:58:05 ET
DRDGOLD Limited (DRD)
Q2 2024 Earnings Conference Call
February 14, 2024 03:00 ET
Company Participants
Niel Pretorius - Chief Executive Officer
Riaan Davel - Chief Financial Officer
Jaco Schoeman - Chief Operating Officer
Presentation
Niel Pretorius
[Technical Difficulty] There is nothing different to the format this time. We’ll be using very similar information or a very similar format to that, which we used in the past. There are a number of themes that will emerge, though, that we’ll pay some additional attention to. And those themes are going to be volume throughput, it’s quite a lot that we want to say about that, our cost make-up for the 6 months, what’s happening to electricity now and going forward, the social dynamic that is starting to also have its impact or that had an impact and how that’s being managed, and then also 1 or 2 things maybe about the political and regulatory reality within which we function.
But let’s jump into the presentation itself and go to the key features for the 6 months. So the gold price has been very, very good. And that, I think, has brought some welcome color into these results. It’s enabled us to, for the 17th consecutive year, pay an interim dividend. This dividend matches the one of last year’s half year dividend, ZAR0.20. That’s on the back of strong revenues of just under ZAR3 billion, 12% increase; operating profit, increase of 15% to ZAR909 million. I would have loved to be in a position to say around about a ZAR1 billion. So I think that is a number we – internally, we’re thinking what may have been, what could have been. Production was down by roughly 7%, and I’ll elaborate on that as I go through the segmental analysis.
Headline earnings on the back of both revenues and the increase in operating profit have gone up by 10%. And I think because of positive headline earnings, it’s just all the more compelling to again declare that dividend that informs the – to an extent, it’s one of the considerations when it comes to the decision whether or not to declare a dividend. We again played our part into the [indiscernible] with ZAR127 million going to revenue services in pay as you earn. You’ll also see in the detailed analysis, the tax position, we are paying income tax. All-in sustaining cost margin of roughly 19.4%. So the book price did help us there.
And then pretty much right in the middle of the page, the main feature is being in a position to take advantage, not to the full extent of the potential advantage, but being in a position to take advantage of a very attractive gold price with a 22% increase in the gold price receivable, just under ZAR1.2 million per kilo this year or last year rather, was my 20th year with DRDGOLD, and I remember when I joined DRDGOLD, gold price was hovering around ZAR60,000 a kilo. So it’s a long time since then, lots of things have changed. I think the gold price is definitely now rebased and recoupled relative to a number of different dynamics that inform it. And we’ll talk a little bit about that as well later on if there’s time....
DRDGOLD Limited (DRD) Q2 2024 Earnings Call Transcript