Harmony Gold's Robust Financial Year and Increased Dividend

Harmony Gold, South Africa’s leading gold mining company, has announced a significant increase in its annual dividend to 75 cents per share, reflecting a surge in profits at its renowned Mponeng mine.

Harmony Gold, South Africa’s largest gold mining company by volume and a global leader in the reprocessing of old tailings dams, is reaping the benefits of its labour with a remarkable 16% increase in revenue, reaching a significant R49.2 billion, up from R42.6 billion the previous year.

The company’s production profit increased by 46% to R13.9 billion from R9.5 billion the previous year. Furthermore, Harmony Gold’s operating free cash flow increased significantly, more than doubling from R2.9 billion to R6 billion. This outstanding financial performance was achieved despite a 1% decrease in overall gold production, thanks to an 8% increase in underground grades.

The company attributes its outstanding annual performance to the exceptional results obtained from its underground mines in South Africa, with Mponeng standing out as a standout performer. Harmony Gold acquired Mponeng, the world’s deepest gold mine, in 2020. Mponeng’s underground recovered grades increased by 16%, contributing to a 22% increase in gold production over the course of the year. Similarly, higher grades from the Moab Khotsong mine contributed significantly to Harmony Gold’s strong full-year performance.

Harmony Gold did not pay an interim dividend following the acquisition of the Eva copper project in Australia. However, it has now declared a final dividend of 75 cents per share, a significant increase from the previous year’s final dividend of 22 cents. The combination of this final dividend and the earlier interim dividend of 62 cents per share completes the full-year dividend return for shareholders.

Harmony Gold attributes its improved profitability and higher operating free cash flows to the implementation of various optimisation programmes across its portfolio of underground operations. The decision to split Tshepong Operations into Tshepong North and Tshepong South at the end of the 2022 fiscal year was notable. This strategic move, which also resulted in the closure of Bambanani, aimed to ensure the viability of smaller, more profitable mines.

Harmony Gold CEO Peter Steenkamp attributes their success to investments in their workforce, a commitment to quality gold production, and a commitment to operational excellence. “Our investment in people, quality ounces, and operational excellence continues to yield results,” he said. We have demonstrated resilience and the ability to deliver on time over the last few years. We have created the necessary flexibility to maintain the strong momentum we have established at our mines. Our cost base is stable and predictable, and we have implemented good controls to ensure that our cost increases are in line with our plans. We have improved our safety performance and designed a higher-quality, more diverse portfolio.”

In summary, Harmony Gold’s impressive financial performance and increased dividend payout are a testament to its strategic acquisitions, commitment to operational excellence, and focus on optimising its mining operations. The company’s ability to adapt and thrive in a volatile market has propelled it to the forefront of the global gold mining industry.