Harmony Gold Mining : Operating overview and trading statement for the six months ended 31 December 2018

08 Feb '19

Johannesburg, Friday 8 February 2019. Harmony Gold Mining Company Limited ('Harmony' or the 'Company') announces an update on its operating results and provides a trading statement relating to its interim results for the six months ended 31 December 2018 ('H1FY19').

Overview of H1FY19 operating performance

Harmony's investments in Hidden Valley and Moab Khotsong have boosted production and contributed significantly to the group's operational free cash flow.

Gold production for the group was 751 000oz for the six months ended 31 December 2018, a 34% increase compared to the six months ended 31 December 2017.

All-in sustaining costs for the group increased by 6% to R528 265/kg for the six months ended 31 December 2018, compared to R500 248/kg for the six months ended 31 December 2017.

Headline and basic earnings

In terms of paragraph 3.4(b) of the Listings Requirements of the JSE Limited (JSE), a company listed on the JSE is required to publish a trading statement as soon as they are satisfied that a reasonable degree of certainty exists that the financial results for the period to be reported upon next will differ by at least 20% from the financial results for the previous corresponding period.

Shareholders of Harmony are advised that a reasonable degree of certainty exists that earnings for the six months ended 31 December 2018 ('H1FY19') will be lower than for the corresponding six months ended 31 December 2017 ('the previous comparable period' or 'H1FY18') primarily due to:

a) an increase in amortisation and depreciation for the Hidden Valley operation as a result of the mine reaching commercial levels of production in June 2018;
b) a reported translation loss on the US$ denominated debt at 31 December 2018; and
c) lower derivative gains recorded in H1FY19.

Headline earnings per share ('HEPS') are expected to be between 7 and 29 South African cents - a decrease of approximately 87% to 97% reported for the previous comparable period (which was 224 South African cents). In US dollar terms, HEPS are expected to be between 1 and 3 US cents per share, which is between 83% to 97% lower than the headline earnings of 15 US cents per share reported for the previous comparable period.

Earnings per share ('EPS') are expected to decrease to between 6 and 26 South African cents per share, which is between 87% and 97% lower than the 203 South African cents per share reported for the previous comparable period.

In US dollar terms, the earnings per share is expected to be between 0 and 3 US cents per share, which is between 83% and 97% lower than the earnings of 15 US cents per share reported for the previous comparable period.

Amortisation and depreciation

A depreciation charge (non-cash) of R915 million (US$65 million) was recorded for Hidden Valley for the six months ended 31 December 2018 (compared to R19 million (US$1 million) for the six months ended 31 December 2017). Hidden Valley reached commercial levels of production in June 2018.

b) Translation loss

A translation loss of R180 million was recognised on the US$ denominated debt as at 31 December 2018, compared to a translation gain of R196 million recorded in the previous comparable period.

c) Lower derivative gains

Included in H1FY19 were derivative gains of R20 million (US$1 million) compared to R337 million (US$25 million) in H1FY18.

The financial information on which this trading statement has been based has not been reviewed or reported on by Harmony's external auditors.

Harmony will publish its interim financial results for the six months ended 31 December 2018 on Tuesday, 12 February 2019.

For more details contact:

Lauren Fourie
Investor Relations Manager
[phone] (mobile)

Marian van der Walt
Executive: Investor Relations
[phone] (mobile)

JSE Sponsor:
J.P. Morgan Equities South Africa Propriety Limited

Harmony Gold Mining Company Limited (Harmony), a world-class gold mining and exploration company, has operations and assets in South Africa and Papua New Guinea (PNG). Harmony has close to 70 years' experience in the industry. Company assets include one open pit mine and several exploration tenements in PNG, as well as 9 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.

The company's primary stock exchange listing is on the JSE with a secondary listing on the New York Stock Exchange. The bulk of our shareholders are in South Africa and the United States. Additional information on the company is available on the corporate website, www.harmony.co.za.