Harmony(US:HMY)2026-03-11 09:02Financial Data and Key Metrics Changes - Gold revenue increased by 20% to ZAR 44 billion, supported by a higher realized gold price and operational discipline [16] - EBITDA rose by 39% to ZAR 18 billion, while cash generated by operating activities increased by 36% to ZAR 14 billion [16] - Operating profit increased by 61% to ZAR 16 billion, and net profit rose by 24% to ZAR 10 billion [17] - Basic earnings per share increased to ZAR 15.63 [5] - Group all-in sustaining cost rose to ZAR 1.18 million per kilogram or $2,115 per ounce due to lower volumes and higher royalties [5][20] Business Line Data and Key Metrics Changes - Gold production for the reporting period was 724,000 ounces, impacted by a cyanide shortage and lower plant recoveries [4] - Underground recovered grades decreased by 11% to 5.7 grams per ton, while face grades mined remained in line with plans [4] - Hidden Valley's production was affected by a mill motor failure and shipping delays [4] Market Data and Key Metrics Changes - The company is geographically diversified with assets in South Africa, Papua New Guinea, and Australia, underpinned by approximately 136 million ounces in mineral resources and about 37 million ounces of mineral reserves [2] - South African royalties increased by 60% due to higher revenue and profitability [20] Company Strategy and Development Direction - The company aims to build enduring long-term value through safe, profitable ounces, quality reserve conversion, and disciplined copper scale alongside its gold portfolio [2] - Plans to bring approximately 100,000 tons per annum of copper online from CSA and Eva within the next 3-5 years [3] - The company is focused on optimizing cash flows and maintaining a strong balance sheet while investing in growth projects [8][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting full-year production, cost, and grade guidance despite short-term headwinds [5] - The company is well-positioned for growth, with a strong balance sheet and significant cash reserves [21] - Management emphasized the importance of safety and operational excellence as foundational to long-term value creation [6][25] Other Important Information - The interim dividend has more than doubled to ZAR 3.4 billion, reflecting strong operational and financial results [5][24] - The company has revised its dividend policy to allow for up to 50% of net free cash to be returned to shareholders [23] Q&A Session Questions and Answers Question: Impact of cyanide shortage and lower recoverability - Management confirmed that the cyanide shortage was a one-off issue and has been resolved, with measures in place to mitigate future risks [34][35] Question: Details on the new dividend policy - The revised policy allows for a base dividend of 30% of net free cash, with potential for an additional upside dividend based on leverage levels [39][23] Question: Synergies with existing assets and resource endowment - Management indicated a focus on returning resources and reserves to viable projects, particularly in the Free State [45] Question: Constraints on CSA mining operations - The main constraints at CSA are related to ventilation and infrastructure, with plans in place to address these issues [51][52] Question: Status of Wafi-Golpu project - Management highlighted the importance of obtaining permits for Wafi-Golpu and noted ongoing discussions with the Papua New Guinea government to advance the project [77][81]