Harmony Gold FY2026 Earnings Call - Record Cash Flow and Dividend Driven by CSA Copper and Operational Discipline
Summary
Harmony Gold delivered a defining year in its evolution into a diversified global gold and copper producer, achieving record financial results with revenue up 34% to ZAR 100 billion. The acquisition of the CSA copper mine contributed significantly to this growth, adding 18,207 tons of copper while maintaining all-in sustaining costs within guidance. This operational excellence, combined with strong gold production of 1.43 million ounces, allowed the company to generate record operating free cash flow of ZAR 17 billion, enabling a substantial increase in shareholder returns.
Key Takeaways
- Group gold production hit 1.43 million ounces, meeting guidance for the 11th consecutive financial year.
- All-in sustaining costs (AISC) remained within guidance at ZAR 1.19 million per kilogram ($2,195 per ounce).
- Underground recovered gold grades averaged 5.83 grams per ton, marginally exceeding the 5.8 g/t guidance target.
- The CSA copper mine contributed 18,207 tons of copper at a recovered grade of 3.75% with a C1 cash cost of $2.47 per pound.
- Revenue surged 34% year-over-year to a record ZAR 100 billion ($5.9 billion), driven by volume and price dynamics.
- Headline earnings per share jumped 87% to ZAR 43.63 per share, reflecting improved operational leverage.
- Group operating free cash flow increased 54% to a record ZAR 17 billion ($1 billion), signaling strong cash conversion.
- The board declared a record final dividend of ZAR 4.8 billion, lifting the full-year dividend to ZAR 8.2 billion ($12.80 per share).
- The dividend yield stands at approximately 3.5%, offering attractive income potential amidst market volatility.
- Management outlined a strategic shift from portfolio progression (pre-2025) to execution and value unlocking (2026-2030), with expectations of a cash flow inflection beyond 2030.
Full Transcript
Call Moderator, Harmony Gold: Good morning. Welcome to Harmony Gold FY 2026 results media call. All telephone line participants will be in a listen-only mode. If you’d like to ask a question, please key in star and then one on your telephone keypad. You may key in star and then two to leave the question queue. If you should need assistance during the call, please signal an operator by keying in star and then zero. Please note that this event is being recorded. I will now hand over to the CEO, Pius Now. Please go ahead, sir.
Pius Now, CEO, Harmony Gold: Good day, and thank you for joining us. I’m joined by Boipelo Lekubo, our FD, and members of our group executive and investor relations teams. FY 2026 was a defining year in Harmony’s evolution into a diversified global gold and copper producer. Through safe, consistent operational delivery, disciplined execution, and strategic investment, we achieved gold production guidance for the 11th consecutive financial year and delivered on all key operating guidance metrics. Group gold production of 1.43 million ounces was in line with guidance, while all-in sustaining costs of ZAR 1.19 million per kilogram or $2,195 per ounce also remained within guidance. Underground recovered gold grades of 5.83 grams per ton was in line with guidance too.
Following its acquisition, CSA copper mine contributed 18,207 tons of copper at a recovered grade of 3.75% at a C1 cash cost of $2.47 per pound, that is U.S., all within guidance as well. This performance translated into record financial results, with revenue increasing by 34% to ZAR 100 billion or $5.9 billion. Headline earnings per share increased by 87% to ZAR 43.63 per share. Group operating free cash flow increased by 54% to a record ZAR 17 billion or $1 billion.
This enabled us to declare a record final dividend of ZAR 4.8 billion or ZAR 7.50 per share, lifting the full-year dividend to ZAR 8.2 billion or ZAR 12.80 per share at a yield of approximately 3.5%. Importantly, this was achieved while continuing to invest in reserve conversion, life extension, and future growth. Up to 2025, we focused on portfolio progression and improvement. Between 2026 and 2030, we will focus on execution and unlocking the value already embedded in our assets. Beyond 2030, we expect a meaningful cash flow inflection as margins strengthen, costs decline, and free cash flow expands. We look ahead with confidence. Our gold and copper portfolio provides optionality. Our balance sheet remains strong. Our people provide the capability to deliver.
Together, these strengths position Harmony to generate cash today, deliver growth tomorrow, and create enduring value through the cycle. Guided by our values and mining with purpose, we remain committed to safe, profitable production, and sustainable returns for all our shareholders and our stakeholders. Before I take your questions, I would like to remind you that all supporting information relating to our results is available on our website. With that, let’s open the line for questions. Thank you.
Call Moderator, Harmony Gold: Thank you, sir. Ladies and gentlemen, if you’d like to ask a question, please key in star and then one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may key in star and then two to leave the question queue. Our first question comes from Martin Creamer of Mining Weekly. Please go ahead.
Martin Creamer, Journalist, Mining Weekly: Good morning, everybody. Your results are uplifting me. It’s a wrapping year. This is fantastic. Really great stuff. I’ve just got one query. You said that the achieved underground recovered grade of 5.83 grams per ton was in line with guidance, yet your news service says it’s above guidance.
Pius Now, CEO, Harmony Gold: Good morning, Martin. It is indeed marginally above guidance. You remember our guidance was above 5.8 grams per ton, and we came in at 5.83 grams per ton, Martin. So 0.03 above that entry point of guidance. Very pleased with the grades, mainly on the back of continued strong performance at our high grade Mponeng Mine, who’s had a stellar year again.
Martin Creamer, Journalist, Mining Weekly: Thanks so much for that.
Pius Now, CEO, Harmony Gold: Thanks, Martin.
Call Moderator, Harmony Gold: Ladies and gentlemen, just a further reminder. If you’d like to ask a question, you’re welcome to key in star and then one on your telephone keypad. It appears we have no further questions in the question queue. I will now hand back for closing remarks.
Pius Now, CEO, Harmony Gold: Thank you very much to everybody who joined the media call this morning. We look forward to perhaps see some of you at the results presentation. Thank you very much.
Call Moderator, Harmony Gold: Thank you, sir. Ladies and gentlemen, that concludes this morning’s event. Thank you for joining us, and you may now disconnect your lines.