NewGold Issuer (RF) Limited reported a 27% decline in net profit for the quarter ended September 2025, even as its bullion-backed investment portfolio climbed to record levels.
The exchange-traded fund (ETF) issuer, whose securities are backed one-for-one by physical gold, posted a net profit of USD 2.69 million, down from USD 3.68 million in March.
Revenue fell about one-third to USD 3.81 million, mainly due to weaker operational income despite stable gold prices.
While profitability softened, NewGold’s balance sheet continued to strengthen. Bullion investments rose to USD 2.64 billion from USD 2.24 billion six months earlier, reflecting stronger investor demand for gold amid global uncertainty and a weaker rand.
Corresponding debenture liabilities increased in line to USD 2.64 billion, preserving the fund’s fully collateralized position.
Fair value adjustments on bullion and debentures, USD 455.9 million each, largely offset one another, consistent with the fund’s structure. This design ensures investors’ exposure to gold price movements without materially affecting the issuer’s profit base.
Operating cash flow came in at USD 2.7 million, down from USD 4 million previously. Dividend payouts were trimmed to USD 1.36 million, less than half of the March level, allowing cash reserves to increase to USD 5.03 million.
Equity edged down to USD 263,089 from USD 356,896, mainly due to dividend distributions and minor foreign exchange translation effects.
NewGold’s latest results underscore the stability and predictability of its gold-backed structure, which provides investors with a direct proxy for the precious metal while insulating the issuer from market volatility.
However, the decline in earnings highlights the narrow profit margins typical of exchange-traded gold instruments, where returns rely more on investor flows and cost efficiency than trading performance.
With global inflation remaining sticky and interest rates staying higher for longer, NewGold’s bullion assets may continue expanding on safe-haven demand, even if profit growth remains modest.
