DRDGOLD NYSE: DRD reported higher revenue, profit and free cash flow for financial year 2026, supported by a 40% increase in the gold price, production above guidance and cost discipline. The company also declared a final cash dividend of ZAR1.20 per share, its 19th consecutive year of dividend payments.
Niël said the final dividend totaled just over ZAR1 billion. Combined with the ZAR0.50-per-share interim dividend, DRDGOLD declared 65% of its free cash flow for the year as dividends, according to CFO Henriette.
Revenue and earnings rise with gold price
Group revenue increased 42% to ZAR11.2 billion from ZAR7.9 billion in the prior year. The company said it benefited from remaining unhedged during a period of sharply higher gold prices, allowing it to receive the full benefit of the increase.
Operating profit rose 83% to ZAR6.4 billion, while headline earnings increased 89% to ZAR4.2 billion. Headline earnings per share rose to 492 cents from 261 cents a year earlier.
Free cash flow increased 85% to approximately ZAR2.3 billion, after capital expenditure of ZAR3.5 billion. Net cash inflow from operating activities climbed to ZAR5.7 billion from ZAR3.5 billion, and the company ended the year with cash and cash equivalents of just under ZAR2.8 billion. Henriette described the balance sheet as debt-free.
DRDGOLD reported profit before tax of ZAR5.9 billion, compared with ZAR3.1 billion a year earlier. The company paid about ZAR490 million in income tax during the year, primarily related to the Ergo operation, while Niël said the company’s broader tax contribution, including pay-as-you-earn taxes, was more than ZAR1 billion.
Production exceeds guidance as costs remain controlled
Group throughput was held at about 25 million tonnes as DRDGOLD managed its tailings storage facilities within prescribed safety factors. Gold production came in just under 5 tonnes for the year, approximately 5,000 ounces above the high end of the company’s guidance. Average yield increased 2% to just under 0.2 grams per tonne.
Cash operating costs were just under ZAR1 million per kilogram, a 7% increase from the prior year and below guidance. Cash operating costs per tonne increased 10% to ZAR188, reflecting a larger trucking component for higher-grade cleanup and remnant material.
At Ergo, revenue rose to ZAR8.1 billion from ZAR5.7 billion, while operating profit more than doubled to ZAR4.1 billion from ZAR2 billion. Unit cash operating costs at Ergo increased 6% to ZAR1.12 million per kilogram.
Far West Gold Recoveries generated ZAR3.1 billion in revenue, compared with ZAR2.2 billion in the prior year. Its cash operating costs rose 10% to ZAR744 million as the operation prepared for expansion, including increased labor hire and activity at older facilities. Far West’s operating profit increased to ZAR2.3 billion from ZAR1.5 billion, with a 76% operating profit margin.
Vision 2028 projects advance
Chief Operating Officer Jaco Schoeman said DRDGOLD reached key milestones in its Vision 2028 capital program during what he described as the company’s peak capital-spending year.
- The Daggafontein tailings storage facility began commissioning in June and reached its planned deposition rate of 25,000 tonnes per day, or about 750,000 tonnes per month.
- The DP2 smelt house was commissioned on July 14, producing its first gold bar. DRDGOLD expects the balance of the plant expansion to be commissioned during the current quarter.
- The company said it is about 95% complete with pipelines supporting the DP2 and regional tailings storage facility, and received a water-use license for the Libanon reclamation station in July.
- Construction of the regional tailings storage facility was about two-thirds complete as of June 30. The company is targeting availability for full 1.2 million-tonne monthly throughput in the first quarter of financial year 2028.
The proposed Withok tailings facility remains in the authorization phase. DRDGOLD has submitted environmental, waste-management and water-use license applications and is seeking approvals by the end of the calendar year. If approved on schedule, construction is expected to be completed in 2029. Schoeman said Daggafontein and Withok together would support an estimated 21-year operating life for Ergo.
DRDGOLD said mineral reserves at Far West increased after bringing Kloof 2 online, adding about 67 million tonnes of material and extending the operation’s life of mine by about four years.
Fiscal 2027 guidance and sustainability measures
For financial year 2027, DRDGOLD guided for production of 160,000 to 170,000 ounces, cash costs of just over ZAR1 million per kilogram, all-in sustaining costs of ZAR1.2 million per kilogram and planned capital expenditure of more than ZAR3 billion.
The company said its solar farm generated 146 gigawatt-hours of power during the year. Carbon emissions fell to 233,000 tonnes from 303,000 tonnes a year earlier, while potable-water savings totaled 900 million liters, representing a 23% reduction. Niël said the solar installation was also contributing to lower operating costs, with estimated savings at Ergo of roughly ZAR13.50 to ZAR14.50 per tonne.
Looking ahead, Niël said DRDGOLD intends to remain unhedged and continue giving shareholders exposure to changes in the gold price. He said lower capital expenditure after completion of the current investment phase could improve the company’s future cash-flow profile, subject to gold prices, production volumes and cost containment.
About DRDGOLD (NYSE:DRD)
DRDGOLD NYSE: DRD is a South African gold producer focused on the retreatment of surface tailings from historic mining operations on the Witwatersrand Basin. The company recovers fine gold particles from low‐grade tailings using an integrated, carbon‐in‐leach (CIL) processing circuit that is designed to maximize yield and minimize environmental impact. DRDGOLD's operations are centered on sustainable resource utilization, transforming previously discarded material into saleable gold doré bars.
The company operates two primary tailings retreatment facilities on the West Rand and East Rand of Gauteng Province.
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