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Harmony Gold expects drop in half-year earnings mainly due to Mponeng acquisition

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(Kitco News) - Harmony Gold Mining (NYSE: HMY), a senior diversified gold producer, announced today that a reasonable degree of certainty exists that its basic earnings for the six months ended 31 December 2021 (H1 FY22) will be 68-72% lower than the previous comparable period.

The company said that this decrease is primarily due to a non-recurring gain on bargain purchase recognized for the acquisition of the assets and liabilities of Mponeng operations and related assets in H1 FY21; decreased gross profit as result of higher production costs; a translation loss on the US$ denominated debt; and
a derivative loss recorded in H1 FY22 compared to a gain in H1 FY21.

Harmony explained that production costs increased mainly due to the inclusion of six months of costs in respect of Mponeng and related assets in H1 FY22 compared to three months in H1 FY21, as well as inflationary increases that also impacted on various facets such as labour and consumables costs.

Harmony added that earnings per share is expected to be between 15 and 18 US cents, which is a decline of between 68% and 62% on restated earnings of 47 US cents per share reported for the previous comparable period.

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The company’s headline earnings per share are expected to between 15 and 18 US cents per share, which is a decrease of between 66% and 59% on the restated headline earnings of 44 US cents per share reported for the previous comparable period.

Harmony Gold has operations and assets in South Africa and Papua New Guinea (PNG). The company's assets include one open pit mine and several exploration tenements in PNG, as well as 10 underground mines and 1 open pit operation and several surface sources in South Africa. In addition, Harmony owns 50% of the significant Wafi-Golpu copper-gold project – a tier 1 asset in a joint venture in PNG.

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