• Revenue: Increased by 18% to 37 billion rand.

• Net Profit: Increased by 33% to 7.9 billion rand.

• Operating Free Cash Flow: Record generation of 10.4 billion rand or $579 million US dollars.

• Operating Free Cash Flow Margin: Expanded to 29%.

• Headline Earnings Per Share: Increased by 33% to 1,270 rand or 71 US cents per share.

• All-in Sustaining Costs: Approximately 972,000 rand per kilogram or $1690 US dollars per ounce.

• All-in Costs: Just over 1 million rand per kilogram or $1810 per ounce.

• Dividend Payout: Record interim dividend of 1.4 billion rand.

• Net Cash Position: Increased to 7.3 billion rand.

• EBITDA: Rolling 12-month EBITDA increased by 28% to over 22 billion rand.

• Cash Operating Costs: Increased by 9% in rand terms, with unit cost per kilogram up 14% to about 814,000 rand or $1400 US dollars per ounce.

• Production: Group production was about 25,000 kg or 800,000 ounces for the first half.

• Recovered Grades: Increased to 6.4 g per ton at South African underground operations.

• Warning! GuruFocus has detected 6 Warning Sign with BOG:GRUPOARGOS.

Release Date: March 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Harmony Gold Mining Co Ltd (NYSE:HMY) delivered a stellar set of interim results with underground recovered grades increasing to 6.4 g per ton, ahead of full-year guidance.

• Group production reached approximately 800,000 ounces for the first half, surpassing guidance.

• Record interim operating free cash flows of 10.4 billion rand or $579 million US dollars were generated.

• Headline earnings per share grew by 33% to 71 US cents per share, with a record interim dividend payout of 1.4 billion rand.

• The company has a strong balance sheet in a net cash position, with significant headroom for future investments.

Negative Points

• Total cash operating costs in rand terms increased by 9% in the first half, mainly due to inflationary pressures.

• Unit cash operating cost per kilogram increased by 14% to about 814,000 rand per kilogram, or about $1400 US dollars per ounce.

• Royalties increased by 46% due to high gold prices, impacting profitability.

• Grades at Hidden Valley have seen a step down this year compared to last, which was anticipated but still affects production metrics.

• The permitting process for the Wafi Gold project is ongoing, causing delays in project execution and potential future revenue.

Q & A Highlights

Q: What strategic changes do you plan to implement as the new CEO of Harmony Gold Mining? A: Beyers Nel, CEO, emphasized the importance of creating shareholder value and maintaining a balanced approach to decision-making. He highlighted the potential of existing ore bodies and the goal to further enhance the company’s value without making drastic changes if the current strategy is effective.

Q: How does Harmony Gold plan to balance shareholder returns with capital expenditure, particularly with the Eva Copper project? A: Beyers Nel, CEO, stated that shareholder value is seen as a combination of dividends and share price appreciation. The company is focused on the Eva Copper project as a key catalyst and will assess shareholder returns after evaluating the project’s progress.

Q: What are Harmony Gold’s plans regarding mergers and acquisitions (M&A) to fill potential production gaps? A: Beyers Nel, CEO, mentioned that while the company is actively looking at M&A opportunities, they will maintain a disciplined approach to capital allocation, focusing on value rather than volume, especially given the current high gold prices.

Q: Can Harmony Gold increase its underground recovered grades beyond 6.4 g per ton? A: Beyers Nel, CEO, explained that pushing grades higher could affect the sustainability of ore bodies. The company aims to mine at the average grade to maximize long-term value and avoid high grading, which could lead to value destruction.

Q: What is the status of the Wafi-Golpu project, and can its timeline be accelerated? A: Beyers Nel, CEO, noted that the permitting process is ongoing, with a focus on equitable distribution of equity among partners. The project is seen as a long-term asset with significant potential, and the company is committed to progressing it as efficiently as possible.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.