Johannesburg, Thursday, 23 February 2023. In terms of paragraph 3.4(b) of the Listings Requirements of the JSE Limited (“JSE”), a company listed on the JSE is required to publish a trading statement as soon as they are satisfied that a reasonable degree of certainty exists that the financial results for the period to be reported upon next – being its interim results for the six months ended 31 December 2022 (“H1FY23”) – will differ by at least 20% from the financial results for the comparable six months ended 31 December 2021 (“the previous comparable period” and/or “H1FY22”).
“Our strategy of allocating growth capital towards high-margin, long-life assets has started to deliver the desired results. Excellent recovered underground grades along with the strong rand-per-kilogram gold price have provided Harmony with good tailwinds. Execution excellence and sustainable mining practices will ensure that we achieve our annual production and cost guidance for the 2023 financial year,” said Peter Steenkamp, chief executive officer of Harmony.
EXPECTED BASIC AND HEADLINE EARNINGS FOR H1FY23
Shareholders of Harmony are advised that a reasonable degree of certainty exists that basic earnings for H1FY23 will be 20% to 40% higher than for H1FY22 primarily due to:
an increased gross profit as a result of higher underground recovered grades and an increase in the average gold price received which offset the increase in production costs;
a foreign exchange translation gain of approximately R30 million (US$2 million), compared to a R298 million loss (US$20 million) in H1FY22, is predominantly attributable to the smaller foreign exchange losses on the foreign denominated borrowings. This is as a result of the Rand weakening against the US Dollar by a smaller margin during H1FY23 compared to H1FY22. These losses were further offset by the gains realised on the commodities’ receivables and cash; and
a derivative gain of R313 million(US$18 million) compared to losses of R35 million (US$2 million) in H1FY22. The derivative gains are a result of the favourable exchange rates compared to locked-in prices as well as additional exchange contracts being entered into at favourable prices
The increase in earnings were partially offset by the following:
production costs which were 2% to 10% higher mainly due to inflationary increases in consumables. Despite these increases, the all-in sustaining costs were below the annual guided all-in sustaining cost of R900 000/kg;
an increase in the taxation expense as well as deferred taxation. The taxation expense increased due to the foreign exchange gains and derivative gains impacting current tax as well as the utilisation of the assessed losses and unredeemed capital expenditure increasing the deferred tax expense.
Earnings per share (“EPS”) are expected to be between 273 and 318 South African cents per share – an increase of 20% and 40% on the earnings of 227 South African cents per share for the previous comparable period. In US dollar terms, the EPS is expected to be between 16 and 18 US cents per share, which is an increase of between 0% and 13% on earnings of 16 US cents per share reported for the previous comparable period.
Headline earnings per share (“HEPS”) are expected to be between 272 and 322 South African cents, which represents an increase of between 10% and 30% from the HEPS of 248 South African cents reported in the previous comparable period. In US dollar terms, the HEPS are expected to be between 17 and 18 US cents per share, which is an increase of between 2% and 8% respectively on the headline earnings of 17 US cents per share reported for the previous comparable period.
Further to this trading statement and the production update released on 1 February 2023, Harmony will publish its financial results for the six months ended 31 December 2022 on Wednesday, 1 March 2023. Please see Harmony’s website for more details: www.harmony.co.za
The financial information on which this trading statement has been based has not been reviewed or reported on by Harmony’s external auditors.
For more details, contact:
Jared Coetzer
Head: Investor Relations |
