Leading up to the release of its interim results for the six months ended December 31, on February 12, Harmony Gold on Friday said its headline earnings per share (HEPS) would be up to 97% lower year-on-year.

Harmony reported gold production for the period of 751 000 oz, which is a 34% year-on-year increase.  

The company said production was supported by the Hidden Valley and Moab Khotsong operations and contributed to the company’s operational free cash flow.

Hidden Valley is an openpit gold and silver mine, in Papua New Guinea, and Moab Khotsong is a gold mine located in South Africa’s North West province.

All-in sustaining costs for the period increased by 6% to R528 265/kg, compared with R500 248 for the prior comparable period.

The company anticipated its earnings for the period to be at least 20% lower than the prior comparable period, owing to an increase in amortisation and depreciation for the Hidden Valley operation, as a result of the mine reaching commercial levels of production in June 2018, a translation loss on the dollar-denominated debt as at December 31, and lower derivative gains recorded in the period.

A depreciation charge of R915-million, or $65-million, was recorded for Hidden Valley for the period, compared with R19-million, or $1-million, for the prior comparable period.

The company recorded a translation loss of R180-million as a result of dollar-denominated debt, compared with a translation gain of R196-million in the prior period.

Additionally, Harmony explained that derivative gains for the period were R20-million, or $1-million, compared with R337-million, or $25-million, in the prior period.

Harmony, therefore, expected its HEPS to be between 7c and 29c apiece, which is a decrease of between 87% and 97% compared with the 224c reported for the prior period.

In dollar terms, Harmony expected HEPS to be between 1c and 3c apiece, which is between 83% and 97% lower than the HEPS of 15c apiece in the prior comparable period.

Earnings per share (EPS) were expected to decrease to between 6c and 26c, in rand terms, which is between 87% adn 97% lower than the 203c apiece declared for the prior period.

In dollar terms, Harmony expected EPS to be between 0c and 3c apiece, which is between 83% and 97% lower than EPS of 15c apiece EPS for the prior comparable period.