‘New gold’ for Harmony

Harmony Gold has seen a large increase in its profits, with the group looking to reduce its risk through diversification into copper and expanding geographically.

In its interim financial results for 31 December 2024, Harmony said it was investing in various projects to position itself to benefit from both gold and copper cycles.

The group said that this diversification strategy will result in higher margins through the continuous improvement in the quality of its portfolio.

Gold revenue for the reporting period increased by 19% to R35,447 million compared to R29,705 million in H1FY24.

Group operating free cash flows increased by 46% to a new half-year record of R10.392 million from the previous half-year record of R7,112 million in H1FY24.

The increase was mainly a result of the higher recovered grades achieved and a 23% increase in the average gold price received to R1,405,020/kg from R1,141,424/kg.

As per the group’s strategy, group production for the reporting period decreased by 4% to 24,816 kg from 25,889kg in H1FY24.

This was primarily due to planned lower recovered grades at Hidden Valley and lower production from its South African optimised operations.

The group said it is well-positioned to benefit from the high gold price, which remains elevated due to high levels of global uncertainty.

“With most of our costs in rand and group all-in costs (AIC) well below the current gold price, we are benefiting from the combination of the current strong US dollar and gold price.”

“Cost increases are in line with our FY25 plans and remain well-managed. Increases are mainly due to annual inflation, higher capital expenditure and planned lower production.”

Looking at the group’s financials, basic earnings per share increased by 32% to 1,265 cents per share compared to 956 cents per share in the comparative reporting period.

Headline cents per share also increased by 33% to 270 SA cents per share compared to 956 SA cents per share.

Harmony’s dividend policy is to pay a return of 20% of net free cash generated to shareholders. It declared a record interim dividend of 227 SA cents.