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Trading statement and operating update for the six months ended 31 December 2020
Harmony Gold Mining Company Limited
Registration number 1950/038232/06
Incorporated in the Republic of South Africa
ISIN: ZAE000015228
JSE share code: HAR
(“Harmony” and/or “the Company”)
Trading statement and operating update for the six months ended
31 December 2020
Johannesburg, Friday, 19 February 2021. Harmony Gold Mining Company
Limited (“Harmony” or the “Company”) is required in terms of paragraph
3.4(b) of the Listings Requirements of the JSE Limited, to publish a
trading statement as soon as the Company is 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 2020 (“H1FY21”)- will differ by at least 20% from the
financial results for the comparable six months ended 31 December 2019
(“the previous comparable period” and/or “H1FY20”).
Expected headline and basic earnings for the six-month period ended
31 December 2020 (“H1FY21”)
Shareholders of Harmony are advised that a reasonable degree of certainty
exists that net profit for H1FY21 will be between R5.7 billion and
R5.9 billion – which is between 325% and 339% higher than H1FY20. In
US dollar terms, net profit for H1FY21 is estimated to be between 283%
and 297% higher at US$349 million to US$361 million in comparison to
H1FY20.
Headline earnings per share (“HEPS”) is expected to be between
761 and 795 South African (“SA”) cents or between 205% and 219% higher
than the previous comparable period (which was 249 South African cents).
In US dollar terms, HEPS is expected to be between 47 and 49 US cents
per share or 175% and 189% higher than the previous comparable period
(which was 17 US cents).
Earnings per share (“EPS”) is expected to be between 942 and 976 South
African cents per share or 278% and 292% higher than the previous
comparable period (which was 249 South African cents). In US dollar
terms, EPS is expected to be between 58 and 60 US cents per share or
between 240% and 254% higher than the previous comparable period (which
was 17 US cents).
The increase in net profit and earnings is primarily due to:
- an increase in production;
- a higher average gold price received;
- gains on derivatives and foreign exchange translation gain; and
- a gain on bargain purchase recognised on the acquisition of Mponeng
and related operations.
The increase was partially offset by an increase in the taxation expense.
Further details in respect of the increase in net profit and earnings
are as follows:
Increase in revenue
Revenue from the existing operations increased by R3.1 billion
(US$191 million) primarily due to an 8% increase in gold production
and the increase in the gold price. The average gold price received
increased by 31% to R896 587/kg in H1FY21 from R683 158/kg in H1FY20.
In US dollar terms, the average gold price received increased by 19%
to US$1 716/oz in H1FY21 from US$1 447/oz in H1FY20.
Gains on derivatives
Gains on derivatives recorded a net gain of R902 million
(US$56 million) for H1FY21 compared to a net gain of
R157 million (US$11 million) for H1FY20. The increased gains are
primarily as a result of a weaker Rand/US$ exchange rate that
resulted in a large gain on the unrealised foreign exchange
derivatives.
Foreign exchange translation gain
The foreign exchange translation gain for H1FY21 of R652 million
(US$40 million) (H1FY20: R36 million (US$2 million)) is primarily
due to the impact of the strengthening of the Rand between June and
December 2020 on the US dollar denominated loans.
Gain on bargain purchase recognised on the acquisition of Mponeng
and related operations (“acquired assets”)
The acquired assets contributed R3.0 billion (US$192 million) in
revenue and R2.0 billion (US$ 128 million) in production costs. In
addition, a gain on bargain purchase of between R1 billion
(US$62 million) and R1.2 billion (US$72 million) will be recognised
on the acquisition. This gain takes into account fair value
adjustments and provisions between the consideration paid and the
net asset value of the acquired assets and liabilities assumed.
Taxation
The taxation expense for the group increased to R772 million
(US$47 million) for H1FY21 from R157 million (US$11 million) for
H1FY20. The current taxation expense in H1FY21 is higher mainly due
to foreign exchange gains on the US dollar loans. The deferred
taxation expense for H1FY21 is higher mainly as a result of the
utilisation of assessed losses and unredeemed capital expenditure
due to increased profitability.
The financial information on which this trading statement has been based
has not been reviewed or reported on by Harmony’s external auditors.
The average exchange rate for H1FY21 of R16.25/$ was used for the dollar
conversion amounts.
Harmony’s interim financial and operational results for H1FY21
Harmony will publish its interim financial and operational results for
the six months ended 31 December 2020 on Tuesday, 23 February 2021.
For more details contact:
Jared Coetzer
Head: Investor Relations
+27 (0) 82 746 4120
Max Manoeli
Investor Relations Manager
+27 (0) 82 759 1775
Marian van der Walt
Senior Group Executive: Enterprise Risk and Investor Relations
+27 (0) 82 888 1242
Johannesburg, South Africa
19 February 2021
Sponsor:
J.P. Morgan Equities South Africa Proprietary Limited
3
Date: 19-02-2021 07:05:00
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