Harmony Gold reports 9% increase in FY revenue

Harmony Gold, a prominent gold producer in South Africa, reported a challenging fiscal year with a full-year loss of R828 million. Despite soaring gold prices boosting revenue and a weaker exchange rate, the company faced hurdles that led to a decrease in headline earnings per share by 175 percent. Peter Steenkamp, the CEO of Harmony Gold, shed light on the company's performance in an interview with CNBC Africa. Steenkamp mentioned that the company's substantial book losses were primarily attributable to hedging, amounting to a staggering 1.9 billion. Despite these setbacks, he highlighted that the company had experienced good cash flows and potential profits, especially with the current high gold prices. Steenkamp emphasized the importance of maintaining the hedging strategy, stating that it would be irresponsible not to hedge at the current high gold prices. He revealed that Harmony Gold only hedges 20% of its production, leaving 80% fully exposed to spot prices. This approach has proven effective over the years, providing a safety net for the company's operations. When questioned about future acquisitions, Steenkamp indicated that Harmony Gold had accomplished its goals in South Africa, particularly with the acquisition of assets from AngloGold Ashanti. Looking ahead, the company faces a declining gold portfolio, prompting a need for strategic decisions on brownfield developments, capital investments, or further acquisitions based on value for money. Despite uncertainties surrounding gold prices, Steenkamp expressed contentment with the current levels. While refraining from speculating on future prices, he acknowledged the favorable environment supported by low global interest rates. This outlook suggests a positive trajectory for the gold market, which could benefit Harmony Gold in the near future.