In a trading update released today (27 Feb), for the half year ending 31 Dec 2024, Harmony has announced that the results are set to differ by at least 20% from the financial results for the comparable six months ended 31 December 2023 (“the previous comparable period” or “H1FY24”).
This is a significant increase and has resulted in the company having to provide a trading update to the market. Commenting on the results, Beyers Nel, Harmony’s CEO says that “The outstanding H1FY25 results are on the back of continuous investment in safety, operational excellence and higher quality ounces. We have a stable, predictable, rand-based cost structure and have been delivering operational consistency across the entire group”.
Expected basic and headline earnings for H1FY25
Shareholders of Harmony have been advised that a reasonable degree of certainty exists that basic earnings for H1FY25 will be higher than for H1FY24, driven by the increase in revenue as a result of the delivery of consistent production and a higher average gold price received.
The average gold price received on sale of the yellow metal, increased by 23% to R1 405 020/kg in H1FY25 from R1 141 424/kg in H1FY24. In US dollar terms, the average gold price received increased by 28% to $2 437/oz in H1FY25 from $1 900/oz in H1FY24.
The increase in earnings was partially offset by the following:
- an increase in production costs due to planned above-inflation increases in labour and electricity costs
- an increase in the current taxation due to higher taxable income and higher royalty taxes driven by an increase in revenue and profitability resulting from favourable gold prices.
HEPS Increase Significant
Consequently, earnings per share (“EPS”) are now anticipated to be between 1182 and 1355 South African cents per share, which represents an increase of between 24% and 42% on the EPS of 956 South African cents per share for the previous comparable period. In United States (“US”) dollar terms, the EPS are expected to be between 66 and 76 US cents per share, which is an increase of between 29% and 48% on the EPS of 51 US cents per share reported for the previous comparable period.
Headline earnings per share (“HEPS”) are expected to be between 1188 and 1361 South African cents, which represents an increase of between 24% and 42% from the HEPS of 956 South African cents reported in the previous comparable period. In US dollar terms, the HEPS are expected to be between 67 and 77 US cents per share, which is an increase of between 31% and 50% on the headline earnings of 51 US cents per share reported for the previous comparable period.
While Harmony’s share price has seen an 82% growth in price over the past year and a 17,52% growth in the past 90 days, the share has seen a -2,68% drop in price in trade this morning, indicating that the market may have been anticipating a higher growth number, particularly with gold prices at record highs.
Harmony will publish its financial results for the six months ended 31 December 2024 on Tuesday, 4 March 2025
