Harmony Gold profit jumps 87% as record gold prices drive bumper shareholder payout

JOHANNESBURG — Harmony Gold Mining Company has delivered a sharp increase in annual earnings and a record shareholder payout after soaring gold prices more than compensated for lower production and rising mining costs.

The South African gold producer reported headline earnings of R27.24 billion for the financial year ended 30 June 2026, an increase of 87% from R14.53 billion in the previous year.

Headline earnings per share rose by the same percentage to R43.63, while basic earnings per share more than doubled.

The performance allowed Harmony to declare a final dividend of R7.50 per share, compared with R1.55 a year earlier. Total dividends for the financial year reached a record R8.1 billion.

The results, released on Thursday, 27 August, underline the scale of the earnings boost that elevated precious-metal prices have delivered to South African gold producers.

Gold price outweighs production decline

Harmony received an average gold price of R2.07 million per kilogram during the year, 35% higher than the R1.53 million per kilogram achieved in the previous financial year.

In US dollar terms, its average realised gold price increased from $2,620 an ounce to $3,811 an ounce.

That increase proved powerful enough to offset weaker production.

Group gold output declined 3% to approximately 1.43 million ounces from 1.48 million ounces a year earlier. Despite the decline, Harmony remained within its production guidance and said it had now achieved annual gold-production guidance for 11 consecutive financial years.

Higher mining expenses nevertheless remain an important consideration.

Harmony's all-in sustaining cost increased 13% in rand terms to about R1.19 million per kilogram. In dollar terms, AISC climbed to $2,195 an ounce from $1,804.

Even with that cost inflation, the much stronger realised gold price widened margins substantially.

Group revenue climbed 34% to R99.24 billion, while gold production profit increased 59% to R48.18 billion.

Record cash generation strengthens investment capacity

One of the strongest features of the results was cash generation.

Harmony reported record adjusted free cash flow of R17.15 billion, up 54% year on year.

The miner attributed the improvement principally to higher gold prices as well as the first contribution from copper sales following its acquisition of MAC Copper and the CSA mine in Australia.

That cash generation gives Harmony greater flexibility to balance shareholder distributions with spending on existing mines and its expanding development portfolio.

The company ended the year with liquidity of approximately R17.1 billion in cash and undrawn facilities.

Its balance sheet moved to net debt of R852 million from net cash of R11.15 billion a year earlier, largely following the MAC Copper acquisition.

Harmony has also secured a new multi-currency funding package comprising $500 million, A$500 million and R7 billion, which it says will lower funding costs, extend maturities and strengthen liquidity.

South African assets remain central

Despite Harmony's growing international copper portfolio, South African gold remains at the centre of the business.

The company has continued investing in extending the productive lives of its mature underground operations.

One notable development is the extension of the Tshepong North mine life to 15 years from six years, illustrating how high commodity prices and targeted capital investment can improve the economics of existing South African mining assets.

For the broader domestic mining sector, Harmony's results provide another indication of the financial benefit flowing from exceptionally strong precious-metal markets.

Higher margins can support mine-life extensions, capital investment and dividends, although rising operating costs and declining production at ageing mines remain structural challenges.

Copper diversification gathers momentum

Harmony is simultaneously transforming itself from a predominantly South African gold producer into a diversified gold-and-copper mining group.

Its recently acquired CSA copper mine in Australia contributed 18,207 tonnes of copper during the financial year, near the upper end of guidance.

Harmony expects CSA to produce between 28,000 and 30,000 tonnes in FY2027.

Construction of the Eva copper project in Australia is also progressing following a final investment decision in November 2025.

Meanwhile, negotiations continue over the proposed Wafi-Golpu copper project in Papua New Guinea, which Harmony jointly owns with Newmont.

The expansion into copper gives Harmony exposure to a commodity expected to benefit from longer-term investment in electricity grids, renewable energy, electric vehicles and other electrification infrastructure.

It also reduces the company's dependence on South African gold production.

Lower gold production expected in FY2027

Harmony expects group gold production to decline again during its new financial year.

The miner has guided for between 1.3 million and 1.4 million ounces in FY2027, compared with approximately 1.43 million ounces produced in FY2026.

All-in sustaining costs are forecast at between R1.30 million and R1.395 million per kilogram.

That means commodity prices will remain particularly important to margins.

Gold has delivered exceptional support to Harmony's earnings, but the company enters FY2027 facing the familiar challenge confronting South Africa's deep-level gold sector: maintaining profitable production while managing rising costs and ageing assets.

For investors, however, FY2026 demonstrated the financial leverage that Harmony retains to a strong gold market.

An 87% increase in headline earnings, record free cash flow and a record R8.1 billion annual dividend have given the company substantial financial capacity as it simultaneously invests in its South African operations and builds a larger international copper business.