SENS-AI
HAR Trading Statement Bullish

HARMONY GOLD MINING COMPANY LIMITED - Trading statement for the six months ended 31 December 2025

Harmony Gold Mining Company Limited
Full analysis

What this filing means

Harmony Gold expects HEPS to rise by 11% to 17% for H1FY26, driven by a 36% higher realized gold price, though this is partially offset by rising production and acquisition-related finance costs.

Harmony Gold is making significantly more money because the price of gold went up 36%. However, their costs for electricity, labor, and their recent copper mine purchase also went up, which ate into some of those extra profits.

Bull case

  • Earnings per share (EPS) are projected to increase by 21% to 30%, reaching between 1527 and 1638 South African cents.
  • Headline earnings per share (HEPS) are expected to grow by 11% to 17%, driven by a significant 36% increase in the average gold price received.
  • Financial performance includes a reversal of impairment at the Tshepong North cash generating unit, reflecting improved asset valuation assumptions due to higher gold prices.

Bear case

  • Earnings growth is heavily supplemented by non-operational factors, including a reversal of impairment and foreign exchange translation gains on a USD-denominated bridge facility.
  • The company faces structural margin pressure from above-inflation increases in electricity and labour costs, alongside a higher royalty tax burden.
  • The MAC Copper acquisition introduced material financial headwinds, including increased finance costs, higher amortisation, and derivative losses on silver contracts.
View original SENS announcement

AI-generated summary by SENS-AI, based on the original JSE SENS filing.

SENS-AI conclusion

Harmony Gold anticipates EPS growth of 21% to 30% and HEPS growth of 11% to 17% for H1FY26, driven primarily by a 36% increase in the average ZAR gold price received. The robust top-line momentum confirms the operational leverage to record gold prices, but the combination of above-inflation production costs and new debt-servicing expenses from the MAC Copper acquisition dilutes the bottom-line translation. These figures are preliminary, unaudited trading statement estimates and do not provide a complete breakdown of margin compression. Investor Takeaway: Strong double-digit earnings growth reinforces the fundamental thesis, though rising costs and derivative losses introduce moderate drag on the overall profitability profile. Signal-to-Price Note: The stock is down 3.14% despite the positive earnings update; one possible explanation is market concern over the rising cost base and debt servicing, or profit-taking against the recent macroeconomic backdrop.

Earnings upgrade is credible and supports the fundamental growth thesis. Operational leverage remains intact, though cost pressures and acquisition debt require monitoring.

Decision framework

Current stance: Lean Bull

Key drivers

  • Earnings per share (EPS) are projected to increase by 21% to 30%, reaching between 1527 and 1638 South African cents.
  • Headline earnings per share (HEPS) are expected to grow by 11% to 17%, driven by a significant 36% increase in the average gold price received.
  • Financial performance includes a reversal of impairment at the Tshepong North cash generating unit, reflecting improved asset valuation assumptions due to higher gold prices.

Key risks

  • Earnings growth is heavily supplemented by non-operational factors, including a reversal of impairment and foreign exchange translation gains on a USD-denominated bridge facility.
  • The company faces structural margin pressure from above-inflation increases in electricity and labour costs, alongside a higher royalty tax burden.
  • The MAC Copper acquisition introduced material financial headwinds, including increased finance costs, higher amortisation, and derivative losses on silver contracts.

What would change the view

  • Forward guidance is cut or withdrawn in the next update.
  • Cash-flow conversion deteriorates relative to reported earnings.
  • Positive thesis fails to hold through the next reporting window.

Evidence from the filing

  • Earnings per share (EPS) are projected to increase by 21% to 30% compared to the previous comparable period.

    “Consequently, earnings per share ("EPS") are expected to be between 1527 and 1638 South African cents per share, which represents an increase of between 21% and 30% on the EPS of 1265 South African cents per share for the previous comparable period.”

  • Headline earnings per share (HEPS) are expected to grow by 11% to 17%, supported by a 36% increase in the average gold price received.

    “Headline earnings per share ("HEPS") are expected to be between 1411 and 1485 South African cents, which represents an increase of between 11% and 17% from the HEPS of 1270 South African cents reported in the previous comparable period.”

  • Financial performance is bolstered by a reversal of impairment at the Tshepong North cash generating unit.

    “a reversal of impairment in respect of property, plant and equipment relating to the Tshepong North cash generating unit ("CGU") recognised in H1FY26 as a result of significantly higher gold price assumptions applied in the valuation.”

  • The company faces significant margin compression risks due to rising production costs, specifically above-inflation electricity and labour increases.

    “an increase in production costs due to above-inflation increases electricity costs and higher labour costs in line with the 5-year wage agreement);”

  • The acquisition of MAC Copper has introduced material financial headwinds, including increased finance costs and derivative losses.

    “an increase in derivative losses, primarily driven by the significant rise in the silver spot price, which moved above the average locked-in floor and cap prices of the outstanding silver collar contracts. • an increase in finance costs, mainly due to the bridge facility for the MAC acquisition”

  • The reliance on unaudited financial information for this trading statement introduces reporting variance risk.

    “The financial information on which this trading statement is based has not been reviewed or reported on by Harmony's external auditors.”
Category
Trading Statement
Published
Mar 9, 2026

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