DRDGOLD Limited (NYSE: DRD), the Johannesburg and New York-listed South African gold producer, expects to report strong growth in full-year 2018/19 earnings and revenue boosted by a higher average price for the precious metal.
In a trading statement released ahead of the full results – due on Tuesday, 3 September – DRDGOLD said it expects to report earnings per share of between 11.65 rand cents ($0.76) and 11.95 rand cents ($0.78) for the financial year ended 30 June 2019, compared to 1.5 rand cents for full year 2017/18.
The group pointed out that the expected increase in EPS was driven by an 11% rise in revenue to 2,762.1 million rand ($180.6 million), up from 2,490.4 million rand ($162.85) in 2018.
DRDGOLD said the contribution from its Ergo unit to revenue was 3% higher year-on-year due to the higher average rand gold price received, which moderated the impact of a 4% fall in gold sold.
The group also noted that Far West Gold Recoveries (FWGR) made its maiden contribution to revenue of 184.6 million rand ($12.1 million), most of it from 1 April 2019 when commercial production began.
It pointed out that FWGR’s revenue and cost of sales were lower than the forecast in the circular to shareholders dated 26 February 2018 due to commercial production only starting on 1 April 2019, instead of the initially planned date of 1 January 2019, the result of a three- month delay in the anticipated effective date of the transaction.
The group noted that FWGR’s all-in sustaining costs per kg were disproportionately impacted by the unwinding of the environmental rehabilitation provision for 11 months and the inclusion of gold sold mostly from 1 April 2019.
DRDGOLD said it ended the year with cash and cash equivalents of 279.5 million rand ($18.3 million), versus 302.1 million rand ($19.8 million) at the end of 2018, and borrowings of nil after 192 million rand ($12.6 million) was raised and repaid on its revolving credit facility during the year.
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