Announcing its results for the six months and year ended 30 June 2016, Harmony Gold CEO Peter Steenkamp says that the company has managed to turn around the previous year’s headline loss (R4.5 billion in FY15) to a headline earnings per share of R2.21 cents.
In light of this, Steenkamp “felt it prudent to declare a dividend of R0.50 cents”, which will be payable on 19 September 2016.
Moreover, Harmony’s revenue increased by 19%, with the company recording a net profit of R949 million ($15 million) on the back of a 21% increase in the R/kg gold price, combined with achieving its production guidance of approximately 1.1 Moz.
The gold miner also reduced its net debt by 54% to R1.08 billion.
Production profit increased to R5.084 billion ($350 million), up 81% from R2.802 billion ($245 million) in FY15 after accounting for a 7% increase in cash operating costs (R821 million or $171 million).
Overall, cost increases were lower than inflation, with all-in sustaining cost (AISC) for all operations increasing by only 3% to R467 526 /kg (decrease of 19% to $1 003 /oz), compared to R453 044/kg ($1 231 /oz) in FY15.
Harmony Gold also continues to differentiate itself through quality grade management – having increased underground grade for the fourth consecutive year – this year by 6% to 5.02 g/t.
Three year growth plan
Over the next three years, Harmony gold plans to maintain and grow its margins efficiently as a means to sustain its business and meet its strategic objectives.
In doing so, the mine plans to grow its production to approximately 1.5 Moz, producing gold at an AISC of $950/oz