Harmony Gold’s earnings surge 211% in half-year
Harmony Gold's half-year profit has increased by almost four fold for the half-year ended 31 December 2020. The company's revenue has also increased by 39 per cent while headline earnings per share jumped by a whopping 211 per cent. The miner has attributed this to its growth strategy which it set out pursue at the beginning of 2016. Harmony CEO, Peter Steenkamp joins CNBC Africa for more.
Tue, 23 Feb 2021 10:37:04 GMT
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AI Generated Summary
- Harmony Gold's earnings surged by 211% for the half-year, with revenue also increasing by 39%.
- The acquisition of the Bonnayn mine, known for its depth and high-grade ore body, has significantly contributed to Harmony's success.
- Despite COVID-related challenges and higher costs, the company is back to full operational capacity and remains optimistic about future prospects.
Harmony Gold, a leading gold producer in South Africa, has reported a significant surge in earnings for the half-year ended 31 December 2020. The company's profit has increased by an impressive 211%, while its revenue has also seen a healthy growth of 39%. This remarkable financial performance has been attributed to the company's growth strategy, which has been in motion since the beginning of 2016. Harmony's CEO, Peter Steenkamp, recently joined CNBC Africa to discuss the company's success and future prospects. Steenkamp highlighted the key factors driving Harmony Gold's exceptional performance during this period. One of the major contributing factors to the company's success was the acquisition of the Bonnayn mine. Harmony officially integrated Bonnayn into its portfolio on the first of October, bringing a quarter of Bonnayn's results into their financial reports. The Bonnayn mine is known for being the world's deepest mine, and while this presents certain challenges related to safety, it also boasts a high-grade ore body, excellent infrastructure, and skilled personnel. Steenkamp emphasized that Bonnayn is a quality asset that has added significant value to Harmony's operations. In terms of production capacity, Harmony Gold had faced operational challenges due to government-imposed restrictions, but Steenkamp confirmed that the company is now back to full operation. While COVID-related disruptions continue to pose some risks, Harmony has managed them effectively, with minimal impact on their operations. However, Steenkamp did reveal that 40 Harmony employees had lost their lives due to COVID-related issues, highlighting the ongoing challenges faced by the industry. The company's overall costs during the reporting period were slightly higher, primarily due to increased royalties and COVID-related expenses. Despite these costs, Harmony Gold's profitability remains strong, reflecting a robust financial performance. Looking ahead, Steenkamp expressed optimism about the future of gold prices and the company's growth prospects. He emphasized that while they are pleased with the current gold price, Harmony is focused on continuing to improve its operational performance and integrating new assets into its portfolio. The company's decision to pay dividends for the first time in 2017 demonstrates its confidence in the future and commitment to returning value to shareholders. In light of the growing conversation around Bitcoin as a potential alternative asset class to gold, Steenkamp remained cautious about its impact on the gold industry. He highlighted the tangible nature of gold as a physical asset with a well-established market, contrasting it with the more volatile and speculative nature of cryptocurrencies like Bitcoin. Overall, Harmony Gold's strong financial results and strategic growth initiatives position the company well for continued success in the future.