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DRDGOLD: Wage Settlement Ends Strike At Ergo

ByEdison
Published 10/11/2013, 06:26 AM
Updated 07/09/2023, 06:31 AM

Wage settlement ends strike at Ergo
DRDGOLD Limited, (DRD) has announced that a wage settlement has been signed with the National Union of Mine Workers (NUM), bringing to an end the two-day strike at its Ergo operations. Higher wage increases for lower-grade job categories have been partly offset by tapering increases for management grades, such that the increase in the annual wage bill is ZAR21m, comparable to our ZAR19m forecast increase before the strike. We estimate this will take 0.3c off our FY14 and FY15 EPS forecasts and reduce our base and upside case valuations by less than 1% or 2c/share to ZAR4.69/share and ZAR6.85/share respectively. This compares to estimated 9% and 6% decreases in our base and upside case valuations if NUM’s demands had been fully implemented.
DRDGOLD
DRDGOLD has announced it has signed a settlement with the NUM over wages and conditions of employment for 2013 and 2014. Consequently, the two-day strike at its Ergo operations has ended and striking employees started returning to work at the start of the night shift on 9 October. No material effect on production is anticipated.

The settlement comprises a higher percentage basic-wage increase for lower-grade job categories, which has been accommodated within DRDGOLD’s budget parameters by tapering increases for middle and senior management. Implementation of the settlement will increase the annual wage bill by ZAR21m.

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