Harmony Gold announces gold production and cash flow increases in year-end results

The results were boosted by the inclusion of a full year of production from Moab Khotsong and Hidden Valley.

Harmony Gold Mining Company has announced its financial and operating results for the year ended 30 June 2019. The company reported reduced net losses, which came to -R2.6 billion, 41 percent less compared to -R4.47 billion in 2018.

Net losses came to -R2.6bn, 41% less compared to -R4.47bn reported in 2018. Losses per share decreased 50% to -498c. While headline earnings per share increased 19% to 204c.

In a statement, the company said that, in line with its strategy “to produce safe, profitable ounces and increasing margins through operational excellence and value accretive acquisitions”, both annual gold production and cash flows were boosted by the inclusion of a full year of production from Moab Khotsong and Hidden Valley in FY19.

The highlights of the results were: 

  • 17 percent increase in gold production to 1.438Moz, resulting in a 23 percent increase in production profit
  • Two percent increase in underground recovered grade to 5.59g/t
  • 32 percent increase in revenue to R26,912 million 
  • Moab Khotsong and Hidden Valley boost cash flow – generated R1,375 million in operating free cash flow
  • Successful hedging strategy topped up – secured cash flow margins, contributing R477 million to cash flow
  • 50 percent decrease in loss per share to 498 SA cents
  • 19 percent increase in headline earnings per share to 204 SA cents 
  • No ordinary cash dividend declared for the year ended 30 June 2019

Harmony CEO Peter Steenkamp extended condolences for the lost lives of 11 employees in mining accidents: 

“I wish to extend my personal, heartfelt condolences to the families, colleagues and friends of the employees who lost their lives in mining accidents in FY19. Together with each and every employee, my aim is to ensure safe production, by preventing fatalities and embedding a proactive safety culture. It is important that every employee returns home each day – both safe and healthy.” 

Steenkamp said that, throughout FY20, Harmony will continue to focus on producing safe, profitable production, pursue safe, value accretive acquisitions and strengthen its cash flows. “Value – rather than volume – will translate to shareholder returns in the long term,” he concluded. 

For FY20, the group plans to produce approximately 1.46Moz at an all-in sustaining unit cost of R579,000 per kilogram.