HMY

Business Context and Reporting Period

Company: Harmony Gold Mining Company Limited
Filing Type: Form 6-K (Interim Results)
Reporting Period: Six months ended 31 December 2025 (H1FY26)
Announcement Date: 11 March 2026

Harmony reported interim results highlighting a strategic shift toward a higher-quality, lower-risk global gold and copper producer. The company announced a revised dividend policy and declared a record interim dividend. Operations include gold mining in South Africa and internationally, alongside maiden copper production from the newly acquired CSA mine.

Key Financial Metrics

Operational Metrics:
- Gold Production: 22,522 kg (724,099 oz), down 9% year-over-year.
- Average Gold Price: R1,909,849/kg (US$3,421/oz), up 36%.
- All-In Sustaining Cost (AISC): R1,180,367/kg (US$2,115/oz), up 21% primarily due to lower production volumes.
- Safety (LTIFR): 4.23 per million hours worked (lowest ever), down from 5.52.

Material Changes vs. Prior Period

• Revenue and Profit Growth: Revenue increased 20% and operating profit surged 61%, driven largely by a 36% increase in the average gold price received.
• Production Decline: Total gold production fell 9% due to temporary challenges in the second quarter of FY26. Underground recovered grade decreased 11% to 5.72g/t due to lower metallurgical recoveries, though face grades remained in line with plans.
• Cost Inflation: AISC increased 21% to US$2,115/oz. While cash operating costs per ounce rose, the primary driver for the AISC increase was the reduction in production volume.
• Copper Expansion: Maiden copper production commenced at the CSA mine. The company also approved the final investment decision for the Eva Copper project.

Guidance, Outlook, and Risks

Dividend Policy and Declaration

Harmony revised its dividend policy to pay up to 50% of net free cash flow to shareholders. An interim dividend of 530 SA cents (approx. 32 US cents) per share was declared, totaling R3,383 million (US$204 million), payable on 28 April 2026.

Full Year Guidance (FY26)

• Gold Production: Unchanged at 1,400,000 to 1,500,000 ounces.
• Gold AISC: Unchanged at R1,150,000 to R1,220,000/kg.
• Underground Grade: Unchanged at above 5.80g/t.
• Copper (CSA): Guidance of 17,500 to 18,500 tonnes for the eight-month period ending 30 June 2026. C1 cash costs expected between US$2.65/lb and US$2.80/lb.

Risks and Contingencies

• Operational Disruption: CSA mine production will be temporarily halted for approximately one month for essential steel replacement on two shaft levels to ensure long-term safety.
• Geopolitical and Economic Risks: Exposure to South African credit rating downgrades, socio-political instability, power stoppages, and exchange rate fluctuations.
• Regulatory and Environmental: Risks related to carbon tax, environmental regulations, and occupational health liabilities (silicosis).

Investor Verification Checklist

• Production Recovery: Verify the timeline for resolving the metallurgical recovery issues causing the 11% drop in underground grade.
• Copper Integration: Monitor the integration progress of the CSA mine and the impact of the planned one-month shutdown on full-year copper guidance.
• Cost Trajectory: Assess whether the 21% increase in AISC is a temporary volume effect or indicative of structural cost inflation.
• Dividend Sustainability: Confirm the company's ability to maintain the new 50% net free cash flow payout policy given the volatility in gold production.
• Capital Allocation: Review the capital expenditure requirements for the Eva Copper project and brownfield extensions against the current liquidity position.