Harmony Gold thwarts Covid-19 as profit skyrockets on higher commodity prices

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Harmony Gold is set to reap the rewards of higher commodity prices, which continue to boost the fortunes of miners, with net profit for for the first half of 2021 expected to be between R5.7 billion and R5.9 billion - a hike of up to 339% compared to the corresponding period. 

In a trading note on Friday, the Johannesburg-based company attributed the significant jump in earnings and net profit to an increase in production, higher gold price received and favourable rand-dollar exchange rate, as well as the acquisition of Mponeng Mine from AngloGold Ashanti.

In October 2020, Harmony took control of the world's deepest mine, Mponeng, and mine waste solutions from AngloGold Ashanti in a $200 million transaction. The acquisition of the landmark asset, southwest of Johannesburg, was the company's first shopping expedition since it bought Moab Khotsong in 2018.

Harmony said the acquired AngoGold Ashanti assets contributed R3 billion in revenue and R2 billion in production costs.

The average gold price received increased by 31% to R896 587 per kilogram from R683 158 per kilogram. Earnings per share is expected to go up from 239 cents to up to 976 cents. 

The company will on Tuesday release its financial statement for the six months to end December. The current upswing in commodity prices has helped companies counter the impact of Covid-19 on operations, with various miners reporting improved financials compared to the previous year.

Gold is currently trading at $1 771.59 an ounce.

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