Harmony Gold share price muted after well guided FY23 results
Harmony Gold Mining Company Limited has posted its full-year results, showcasing a solid performance amidst fluctuating gold prices and challenging operational conditions
Key Takeaways:
Solid Performance: Despite fluctuating gold prices and challenging operational conditions, Harmony Gold Mining Company Limited has showcased a strong performance over the last financial year.
Maintained Gold Production: Harmony Gold has managed to maintain its gold production levels, with only a marginal 1% decrease year-on-year.
Improved Quality of Gold: Despite the slight decrease in production, Harmony Gold saw an impressive 8% increase in its underground grade, indicating a higher quality of gold being mined.
This improvement in quality, coupled with a surge in the gold price received per kg, has significantly contributed to the company's profitability.
Cost Efficiency: Harmony Gold has demonstrated cost efficiency by reducing its cash operating costs per kg by 5% year-on-year
Financial Milestones: Harmony Gold has achieved significant financial milestones, including a dramatic turnaround in its basic earnings per share, marking a more than 100% increase.
Harmony Gold FY 2023 results
Harmony Gold Mining Company Limited has posted its full-year results, showcasing a solid performance amidst fluctuating gold prices and challenging operational conditions. While Harmony’s results highlight a strong performance over the last financial year, they were well guided through the groups recently released trading statement. The company has also already produced a 42% total return (dividends and capital gains) for the year to date, and the share price at current levels might be at a premium to an assumed longer term fair value.
The South African-based gold mining company has managed to maintain its gold production levels, with only a marginal 1% decrease year-on-year. In the year ended 30 June 2023, the company produced 45,651 kg of gold, compared to 46,236 kg the previous year.
Despite a slight downtick in production, Harmony Gold saw an impressive 8% increase in its underground grade, indicating a higher quality of gold being mined. This improvement in quality, coupled with a 15% surge in the gold price received per kg, has significantly contributed to the company's profitability.
The company's cash operating costs per kg fell by 5% year-on-year, leading to a 10% decrease in operating costs per ounce. This cost-efficiency is a testament to Harmony Gold's operational improvements in a volatile market.
The company's total costs and capital also fell by 8% per kg, resulting in a 7% decrease per ounce. These cost reductions have helped Harmony Gold to mitigate the impact of lower gold production and have contributed to a 46% surge in production profit, amounting to R 13.977 billion.
Harmony Gold's financial results reflect its strong operational performance. The company reported a dramatic turnaround in its basic earnings per share, from a loss of 172 South African cents in the year ended 30 June 2022, to a gain of 780 cents in the year ended 30 June 2023. This represents an increase of over 100%, marking a significant milestone in the company's financial performance.
Headline earnings also saw a significant boost, with a 62% increase in R million and a 39% increase in US$ million. This has led to a 60% increase in headline earnings per share in SA cents and a 36% increase in US cents.
Harmony Gold's full-year results demonstrate the company's resilience and adaptability in a challenging market environment. The company's impressive operational and financial performance is a testament to its strategic focus on cost-efficiency and quality improvement.
Harmony Gold: Analyst / broker ratings
A poll of analyst / broker ratings by Refinitiv suggests Harmony Gold to be a long term ‘hold’ as of the 30th of August 2023. A mean of these analysts price target estimates suggest a long term fair value share price of R78.88.
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