Sept 5 (Reuters) – South Africa’s Harmony Gold increased its dividend on Thursday as its annual profit more than doubled from the prior year, boosted by higher gold production, better grades and record prices.

Harmony’s headline earnings per share – a profit measure – jumped to 18.52 rand ($1.04) in the year ended June 30, up from 8 rand in the previous year.

The top gold producer in South Africa by volume declared a final dividend of 0.94 rand per share, up from 0.75 rand.

Harmony’s gold production rose 6% to 1.56 million ounces, surpassing its target of 1.55 million ounces. Its average gold price increased 16% as bullion prices surged to record highs.

Higher gold prices and a 6% improvement in underground recovered grades drove Harmony’s operating free cash flows to a record 12.7 billion rand ($710.51 million).

($1 = 17.8740 rand)

(Reporting by Nelson Banya; Editing by Christian Schmollinger and Subhranshu Sahu)