DRDGOLD Limited (DRD) Earnings Call Transcript

Thanks again joining us for this DRDGOLD's interim results for financial year 2026. Before we start this presentation, I want to take a moment to remember Jan Nelson, who passed away earlier this week. Jan was a friend, and I'm ashamed to say that in recent time, I wasn't much of a friend to him, but his legacy lives on. He laid the foundation for what has become a very successful company in Pan-African Resources, and we will always remember him not just as an astute leader and a businessman, but also as a good person, and he ended the life worth living. Joining me today, as usual, are Henriette and Jaco, our CFO and COO, respectively. They will be doing most of the talking today. Henriette has now fully assumed the position of Chief Financial Officer, and that is from effect of the 1st of February. Portfolio is now hers. And I again want to say congratulations and good luck, Henriette. The transition is also now over in this portfolio, as is the restructuring of the finance portfolio, which together with certain operational changes, also saw the promotion of [indiscernible] [Mashatola] to Head of Corporate Finance and adding to her role in treasury, tax, financial and integrated reporting, amongst other things, the role of Investor Relations, and she will also join Jaco now on the business development team. The format for today's presentation will once again be myself presenting the highlights. I will then hand over to Jaco, who will take you through operational performance. Jaco will hand over to Henriette, who will take you through the financial results. She will hand you back to Jaco to update you on Vision 28 and projects, and then I will cover what is left afterwards. Can we move to the next slide, please? This presentation will again contain certain forward-looking statements, and I therefore request that you familiarize yourself with the disclaimer. Next slide, please. So to kick things off, performance at a glance. You will have noticed that our Board has approved an interim cash dividend of ZAR 0.50 per share. This is our 19th consecutive financial year of declaring a dividend. And this one is special. We thought we -- when we embarked on Vision 28 that by now, we would be carrying some debt, substantial debt, in fact, on the balance sheet that by paying a dividend, that was going to be a stretch. Of course, with the surge in gold price, things could not be any different, and we are very pleased that we were able to distribute a portion of our free cash. Speaking of free cash, it increased by 149% over the comparative period to rather ZAR 791 million, and that has pushed our cash and cash equivalents at the end of the period to ZAR 1.7 billion. Revenue, just over ZAR 5 billion showed a 33% increase, operating profit of ZAR 2.7 billion is up by 72%. We saw a 99% increase in headline earnings, and we reinvested ZAR 1.6 billion in capital reinvestment mostly towards Vision 28. And in terms of sustainable development, you see that our Ergo [indiscernible] plant apparent in the set of results. Our carbon footprint shrunk by mighty 34% and electricity consumption of the grid is down 28%. In terms of operational performance, I think we've mentioned this, and we'll just mention that again that Ergo's current design is one of reduced throughput rate with a larger proportion of throughput from high-volume, low-grade sites. In this regard, you'll recall that in the latter part of 2024, we were almost entirely reliant on cleanup at mature sites when our water usage licenses were being delayed for the replacement sites. So the current mix that we are mining is quite different with a lower proportion of that higher-grade material that was always a welcome part of the blend. On the whole though, the group still trended towards the higher range of guidance with 2.3 tonnes of gold produced. The throughput was 12.5 million tonnes for the period, which on a flat extrapolation takes us to roughly 25 million tonnes for the year. And I think this provides some perspective on what we are targeting in terms of Vision 28, which is designed towards a throughput rate of 3 million tonnes per month, which will take it to 36 million tonnes per year and 6 tonnes of gold output per year. So certainly project worth investing in. A pleasant outcome for which we have the gold price to thank is an all-in sustaining margin for 48% or rather up 48%. For the rest, in terms of operational, the numbers pretty much follow guidance. I'll now hand you over to Jaco for some added color on the production numbers. [Audio Gap]