South African gold giant set to shine

South Africa’s largest gold mining company, Harmony Gold, had a strong start to its 2025 financial year as the gold price continues to climb.

In a trading update released on Thursday, 27 February 2025, Harmony outlined its earnings expectations for the six months through December 2024.

Harmony’s earnings per share (EPS) are expected to be between 1,182 and 1,355 cents per share, which represents an increase of between 24% and 42% on the miner’s 2024 EPS.

Headline earnings per share (HEPS) are expected to be between 1,188 and 1,361 cents, an increase of between 24% and 42% from its 2024 HEPS.

The company attributed this growth to the delivery of safe, predictable and consistent production and a higher average gold price received. 

The average gold price received increased by 23% to R1,405,020/kg in the first half of Harmony’s 2025 financial year. In US dollar terms, the average gold price received increased by 28%.

The gold price has been on a winning run for over a year now.

Since 2019, the price of the precious metal has risen 85% as demand has spiked. According to the World Gold Council, demand for gold hit a record high of $100 billion in the third quarter of 2024.

The dollar price of gold soared by 27.2% in 2024, and over a three-year period, gold is up 43.5%

This is a far cry from the pre-pandemic trends when investors had little interest in gold as its performance lagged that of other asset classes.

The World Gold Council attributes this growth to central bank and investor buying, which have more than offset a notable deceleration in consumer demand.

While this strong gold price aided Harmony’s recent results, the miner noted that the increase in earnings was partially offset by two factors –

• An increase in production costs due to planned above-inflation increases in labour and electricity costs
• An increase in the current taxation due to higher taxable income and higher royalty taxes driven by an increase in revenue and profitability resulting from favourable gold prices

“The outstanding H1FY25 results are on the back of continuous investment in safety, operational excellence, and higher quality ounces,” CEO Beyers Nel said. 

“We have a stable, predictable, rand-based cost structure and have been delivering operational consistency across the entire group.” 

“Our disciplined approach to capital allocation has enabled us to leverage the current high gold price environment to generate exceptionally robust operating free cash flows.” 

Harmony will publish its results for the six months ended 31 December 2024 on Tuesday, 4 March 2025.