DRDGOLD said it remained “in a favourable position” to declare a year-end dividend in August following third (March) quarter production numbers in which it disclosed an increase in cash of R70.4m.
Cash and cash equivalents stood at R2.31bn as of March 31 after paying the interim cash dividend of R167.8m for the six months ended December. External borrowings remained at zero, it said.
“The company remains in a favourable position to, in the absence of unforeseen events, consider declaring a final cash dividend in or around August 2022,” it said.
Adjusted earnings before interest, tax, depreciation and amoritsation (EBITDA) declined quarter on quarter some R367.3m owing to a 6% decrease in gold sold, which was in part offset by a 3% increase in the average rand gold price received to R914,864/kg.
Shares in the company are about 14% weaker on a 12-month basis and around 4% lower year-to-date. This is after reaching a high of about R27/share in 2020. The stock is currently at R12,65/share.
In February, DRDGOLD posted a 48% decline in interim headline earnings to 58 South African cents per share (2021: 111c/share). The year-on-year deterioration in earnings was a result of a lower gold price and “exceptional production and gold prices” in the previous six month period, said Nïel Pretorius, CEO of DRDGOLD.
DRDGOLD subsequently halved the dividend year-on-year to 20c/share. The company ended the interim period with cash of R2.24bn after paying a R345.5m final dividend in September.
DRDGOLD is 50.1% owned by Sibanye-Stillwater which swapped access to gold mining tailings adjacent to its West Rand gold mines in return for the shares.