Harmony Gold has reported a 36% rise in half-year net profit, as a strategy to invest in higher-margin, longer-life assets has begun to pay off.
The miner on Wednesday reported an increase in net profit from R1.4 billion in the six months to end December 2021 to R1.9 billion in the comparative period in 2022.
Revenue of R23.3 billion increased 6% while operating profit grew 7% to R5.4 billion. Headline earnings per share was 18% higher at R2.93 a share. Earnings per share grew 31% to reach R2.98.
The miner reported a 5% decrease in total gold production to mainly due to the closure of its Bambanani mine in June last year. Underground recovered grades however increased to 5.68g per tonne, up from 5.39g per tonne. Harmony enjoyed a 12% increase in average gold price received while all-in sustaining costs grew by 11%.
No interim dividend was declared due to the allocation of capital towards near-term copper and growth projects.
"Our strategy of allocating growth capital towards high-margin, long-life assets has started to deliver the desired results", said Harmony CEO Peter Steenkamp.
"Excellent recovered underground grades along with the strong rand-per-kilogram gold price have provided Harmony with good tailwinds."
As safety improves to a lost-time injury frequency rate of 5.65 - trending below 6.00 for five consecutive quarters – he said execution excellence and sustainable mining practices will ensure Harmony achieves its annual production and cost guidance for the 2023 financial year, which ends in June.
Net debt to Ebitda [earnings before interest taxes depreciation and amortisation] of R4.7 billion, increased to 0.6 times from 0.1 times due to the acquisition of Eva Copper in Northern Queensland, Australia.
"This near-term copper project complements our tier 1 Wafi-Golpu copper-gold project in Papua New Guinea," Steenkamp said of the project. "These assets bolster the Harmony investment case as gold-copper specialists with a growing international footprint."