Harmony Gold prepares for shining results

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Harmony Gold prepares for shining results

Published Date: 2021-02-22 | Source: Stephen Gunnion | Author: Stephen Gunnion

Harmony Gold prepares for shining results

The mining company has benefitted from increased production, a higher rand gold price and its bargain purchase of the Mponeng gold mine.

Harmony Gold Mining will report a sharp rise in first-half earnings after it increased gold production and benefitted from a higher gold price. It says its profitability was also boosted by the bargain purchase of AngloGold Ashanti's Mponeng gold mine last year.

In a trading statement, the gold mining company said revenue from existing operations increased by R3.1 billion in the six months to end-December, primarily due to an 8% rise in gold output and the higher gold price. The average gold price received over the period was 31% higher than a year earlier in rand terms and was up 19% in dollars.

On top of the benefit of the higher rand gold price, Harmony said it also benefited from gains on derivatives and foreign exchange translations gains. It said the Mponeng and the other gold assets it acquired from AngloGold Ashanti contributed R3 billion in revenue for the period and R2 billion in production costs. It said a gain on bargain purchase of between R1 billion and R1.2 billion would be recognised on the acquisition, taking into account fair value adjustments and provisions between what it paid for the acquisition and their net asset value. Some of the gains it made over the six months would be offset by higher tax expenses.

The company said net profit would be as much as 339% higher at R5.9 billion. It expected headline earnings per share to be between 205% and 219% higher than the 249c reported in the first half of the prior financial year. Earnings per share would be between 278% and 292% up from the 249c previously reported.

Harmony's results are scheduled for the release tomorrow. Its shares closed 1.8% up at R56 on Friday.





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