(Kitco News) - Senior gold miner Harmony Gold (NYSE: HMY) announced today that for the financial year ended 30 June 2022 (FY22), the company's earnings per share is expected to be between a loss of 160 and 189 South African cents per share.
The company said that this result is a decrease of more than 100% on the earnings of 842 South African cents per share for the previous comparable period.
In US dollar terms, the earnings per share is expected to be between a loss of 8 and 9 US cents per share, which is a decline of more than 100% on earnings of 54 US cents per share reported for the previous comparable period.
Harmony explained that basic earnings for FY22 will be lower than for FY21 primarily due to a decreased gross profit as a result of higher production costs, as well as a higher impairment loss that has been recognised on property, plant and equipment and goodwill.
The company's headline earnings per share is expected to be between 461 and 549 South African cents, which represents a decrease of between 53% and 44% from the headline earnings per share of 987 South African cents reported in the previous comparable period.
In US dollar terms, the headline earnings per share is expected to be between 30 and 35 US cents per share, which is a decrease of between 53% and 45% on the headline earnings of 64 US cents per share reported for the previous comparable period.
Harmony also said that production costs increased mainly due to the inclusion of Mponeng and its related assets' operating costs for a full year compared to nine months in FY21, adding that inflationary increases also affected various facets such as labour, consumables and electricity costs.
Overall, all-in sustaining cost for the group was marginally higher than the guidance range for FY22 of R805 000/kg to R835 000/kg.
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The company also noted it recorded FY22 impairment of R4 433 million (US$273 million) for property, plant and equipment and goodwill.
In addition, Harmony reported a foreign exchange translation loss of approximately R327 million (US$21 million) in FY22, compared to a R670 million gain (US$44 million) in FY21.
Earlier, Harmony announced that despite multiple challenges, the company achieved its annual total production guidance of between 1,480,000 and 1,560,000 ounces of gold.
CEO Peter Steenkamp said, "As we continue to grow and diversify production, capital expenditure must remain disciplined, focused and affordable. We continue to optimise our existing operations and asset mix, reallocating capital towards those projects and operations that will deliver the highest possible returns, while lowering the overall risk profile of Harmony. Not only will we prioritise investment in our high-grade assets, we will achieve a more balanced production split and ensure all of our mines are safe and profitable."
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.
