Tawanda Karombo

Harmony Gold Mining Company has reported significant growth in its earnings for the half-year period ending December 2024 as stability begins to define South Africa's operating environment.

The company's CEO, Beyers Nel, attributed much of this success to improved conditions, especially the cessation of large-scale load shedding that has troubled the nation’s mining sector.

Harmony Gold saw revenues soar by 19% to a R35.45 billion, with net profits experiencing a commendable increase of 33% totalling R7.93bn.

Headline earnings per share also mirrored this positive trend, climbing by 33% to reach 1 270 cents. This favourable shift has enabled the company to declare a record interim dividend of 227 cents per share, marking a 54% increase compared to the previous year.

In an interview with Business Report, Nel expressed optimism regarding the mining environment's improvement.

“The operating environment in South Africa has been stable and we saw the end of large scale load shedding. The operating environment from South Africa has been positive and I think optimism got out in the last year and has increased for us in particular,” Nel said.

The period under review was solidified by higher gold prices although gold production fell by 4% to 797 854 ounces. There was some respite after underground recovered grades improved by 2% to 6.40 grams per ton.

The gold price received for the half year surged by 23% to $2 437 per ounce while all-in sustaining costs rose by 15% to R972 261 per kilogram of gold. Overal, operating costs paced up by 14%, reflecting inflationary pressures.

Nel told Business Report that Harmony Gold was focusing on disciplined capital allocation. He added that this was because Harmony Gold cant control the gold price.

“We believe the gold price would would be stronger for longer but we are trying not to focus too much on the gold price as it is out of our control. We focus on trying to improve our safety and consistent predictable production as well as cost management which is within our control,” he said.

With Harmony Gold gearing up for near-term copper production, the company is aiming to diversify and de-risk its portfolio, said Greg Davies, head of wealth at Cratos Capital .

“Harmony Gold delivered strong financial results and operational improvements while facing cost pressures and production challenges. Its copper diversification strategy could unlock future growth,” he said.

However, Stephan Erasmus, investment analyst at Anchor Capital, said Harmony Gold’s results for the first half period under review were within expectations “mainly due to strong grade performance” at Mponeng.

Erasmus though said that the repeated 2025 financial year group guidance “indicates a weaker outlook” for the second half of 2025.

“Additionally, its dividend payout ratio is now lower than that of major South African listed peers, and the EVA Copper project poses increasing risks related to capital allocation,” Erasmus said via email.

Harmony Gold’s capital expenditure for the half year increased by 23% to R4.7bn, accounted for by higher sustaining capital and a greater portion allocated to advancing the company’s major projects currently in execution.

These include Mponeng life-of mine extension project, adding 2.43 million ounces in mineral reserves at a recovered grade of approximately 9 grammes per tonne and annual steady state production of around 250 000 ounces over a 20-year life of mine.

This project will enable Harmony Gold to target the Ventersdorp Contact Reef and Carbon Leader Reef ore bodies.

Harmony said it had built a robust and flexible balance sheet which is in a net cash position of R7.2bn propped up by R17.5bn in available cash and undrawn facilities.

BUSINESS REPORT

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Harmony Gold reports strong earnings as South Africa's operating environment stabilises

Harmony Gold poised for strong interim earnings boost amidst soaring gold prices