DRDGOLD Limited

Group revenue was just over ZAR 11 billion, up 42% year over year, with gold price up about 40%; operating profit was ZAR 6.4 billion, up 83%; headline earnings were ZAR 4.2 billion, up 89%; and free cash flow was ZAR 2.2 billion, up 85%, after capital expenditure of ZAR 3.5 billion. Production came in just below 5 tonnes, roughly 5,000 ounces above the high end of guidance, and average yield was just under 0.2 gram per tonne, up 2%. Cash operating cost was just under ZAR 1 million per kilogram, up 7%, while cash operating cost per tonne was ZAR 188 per tonne, up 10%. Guidance for financial year 2027 is 160,000 to 170,000 ounces, cash costs of just over ZAR 1 million per kilogram, all-in sustaining costs of ZAR 1.2 million, and planned capital of just over ZAR 3 billion. Management also said Far West is expected to move toward 1.2 million tonnes a month, with RTSF targeted for beneficial occupation and full 1.2 million tonnes a month in financial year 2028, while Withok is now expected to come online in 2029 rather than 2028.

The CEO framed the year as proof that DRDGOLD can turn its capital program and operating discipline into stronger cash generation, while still paying dividends and improving sustainability metrics. He emphasized that the company remains deliberately unhedged, wants to keep full exposure to the gold price, and expects the cash-flow profile to become even more attractive once the heavy capital phase rolls off. His tone was upbeat and confident, but he repeatedly stressed prudence on tailings safety, commissioning, and timing.

The CFO highlighted strong operating leverage from the gold price and solid cost control, noting Ergo revenue of ZAR 8.1 billion versus ZAR 5.7 billion last year and Far West revenue of ZAR 3.1 billion versus ZAR 2.2 billion. She said Ergo cash operating costs rose 7% and Far West 10%, with Far West still a high-margin business at a 76% operating profit margin and cash operating cost of ZAR 561,000 per kilogram. She also pointed to a stronger balance sheet with cash and cash equivalents just under ZAR 2.8 billion, PPE up from ZAR 8.5 billion to ZAR 11.9 billion, and a deferred tax balance of ZAR 2.9 billion that should keep rising as capital spending and profitability continue.

Analysts focused on valuation versus South African gold peers, renewable energy ambitions, platinum-group metal opportunities, uranium, and technology modernization. Management said the stock had previously lagged but now appears to be tracking peers more closely; on renewables, it mentioned a 30-megawatt facility coming through the grid and said it may pursue more solar if the team supports it. On platinum, management said there is opportunity but any involvement would likely depend on Sibanye-Stillwater inviting DRDGOLD into the discussion; on uranium, it was explicitly negative, saying uranium recovery would hurt gold recovery and would require compelling economics that management does not see in the current tailings model. On AI and modernization, management said AI should be an analytical tool, not a decision-maker, and pointed to ongoing process improvements like the upflow reactor.