Harmony Gold Mining Company Limited 2026 Q4 Earnings Call

Right, we could get going. Good day, everybody, and thank you for joining us for Harmony's results presentation for the financial year ended 30 June 2026. The past year demonstrated the value of a clear strategy executed with discipline, resulting in exceptional performance and a further strengthening Harmony's position as a growing global gold and copper producer. Our investment case continued to be underpinned by three factors, which is discipline delivery, portfolio progression, and enduring value. Collectively, they highlight the strength of our operational and financial performance, the advancement of our portfolio, and our commitment to sustainable long-term shareholder value. Before we begin, I will urge you to please take note of our safe harbor statement. This presentation contains forward-looking statements that are subject to risks and uncertainties, as outlined in our public disclosures and the disclaimer on this slide.

For us at Harmony, discipline delivery starts with what we set out to achieve and how we performed over the last 12 months. Discipline for us means three things: operating safely and predictably, maintaining our strict cost controls while the gold price runs, and converting the performance into cash certainty through effective capital allocation. I am pleased to say that in FY 2026 we delivered on all three of those, and we did so from a portfolio that is materially stronger than it was only a few years ago, with margins continuing to improve through disciplined capital allocation and portfolio optimization. Harmony today is a product of a decade of deliberate but disciplined investment. Thinking of Hidden Valley, Moab Khutsong, Mponeng, Mine Waste Solutions, Eva Copper, and most recently CSA, were all acquired to lower the overall risk profile and improve production quality. Together, these assets underpin our portfolio today.

Up to 2025, we focused on acquisitions and improving portfolio quality. From 2026 to 2030, our focus is execution, delivering and unlocking the value already embedded in what we own. Beyond 2030, we expect a cash inflection, stronger margins, lower real unit costs, and growing free cash flow. In Harmony, every decision we make is aimed at either improving safety, expanding margins, protecting cash flows, and creating long-term value through disciplined capital allocation. As our portfolio continued to evolve, we are pleased that the solid FY 2026 result reflect this quality and the opportunity inherent in our reserve base. These numbers highlight the benefits of consistency and delivering to guidance. On safety, we achieved our lowest-ever lost time injury frequency rate of 5.05. Zero harm would and always does remain our priority, and protecting our people at work is what matters most to us.

Tragically, we have lost six colleagues during the year, albeit significantly down from the previous financial year. To us, every lost life is simply one too many, and every effort is made to reach zero harm in Harmony. On production, we made gold guidance for the 11th consecutive year now. We produced 1.43 million ounces of gold and delivered 18,200 tons of copper at the upper end of guidance. Grades and costs too were both well within guidance, with gold all-in sustaining costs of ZAR 1.19 million per kilogram and copper C1 costs of $2.47 US cents per pound. It is this consistency that turned a higher gold price into cash certainty. We delivered rather exceptional earnings growth alongside record shareholder returns.

Our headline earnings per share increased by 87% to ZAR 43.63 per share. The company declared a record final dividend of ZAR 7.50 per share for a total of ZAR 8.2 billion for the financial year. At Harmony, safety is our foremost priority always, and in the past financial year, we continued to make real progress. Our lost time injury frequency rate, as I said, of 5.05 per million ounce worked is the lowest in Harmony's 76-year history. This reflects years of investment in our people, but also in our infrastructure, some technological advancements, and also leadership visibility. As a good example of this post year end, Kusasalethu achieved an extraordinary safety milestone of 3 million loss-of-life-free shifts.

Many of you would think that 3 million is not that significant, but whilst 3 million has been achieved at other operations over the years around Harmony and in the country, this achievement is particularly significant given that it is the first ultra-deep-level gold mine in South Africa's West Wits region to achieve this safety milestone. This, to us, strengthens our belief that zero harm is in fact possible through relentless execution, but also through strong tripartite leadership and embedded proactive safety culture. On safety, our priorities remain clear. Prioritizing safety ahead of production, critical control verification at every working place, visible and heartfelt leadership supported by greater ownership, focused action on repeat and high potential incidents, and embedding technology where appropriate and learning into daily operating routines. At Harmony, we have said this many times before, we believe a safe mine is always a productive mine.

Operating leverage in our gold portfolio is significant and reflected in these results. The high-grade underground operations in Mponeng and Moab Khutsong produced 15 tons at 9 grams per ton, with a 38% adjusted free cash flow margin. Mponeng was the primary driver of this performance, as Moab Khutsong moves into the ore gap we previously flagged. Performance from the South African underground optimized operations has also strengthened year-on-year. These assets produced 17 tons and margins expanded from 9% to 25%, lifting adjusted free cash flow by a phenomenal 284% to around ZAR 9 billion. Our surface and retreatment assets contributed around 7 tons at a solid margin of 46%. Our gold retreatment operations are the biggest by volume globally. These are low risk, high margin ounces that generate meaningful cash flow by recycling old tailings storage facilities. Our international assets delivered exceptional margins.

Hidden Valley, for one, had an outstanding year. It produced almost 6 tons of gold at an all-in sustaining cost of around ZAR 660,000 per kilogram or $1,200 per ounce. Globally competitive by any measure. Adjusted free cash flow margin continued to increase to an incredible 68%, supported by stronger silver by-product credits. As for CSA, that mine is now fully integrated and optimization is underway. In the 8 months since acquisition, CSA produced 18,200 tons of copper at a low C1 cost of $2.47 per pound at a 22% adjusted free cash flow margin. While copper currently contributes 3% to group revenue, CSA has established an important strategic foothold in the metal and positions Harmony to benefit from its long-term growth potential. Our focus on execution and cost discipline continues to be reflected in the higher all-in sustaining cost margins.

In FY 2026, the average gold price received rose by 35% to ZAR 2.1 million per kilogram. Our all-in sustaining costs rose by 13% to ZAR 1.2 million per kilogram. The widening gap between these two numbers show our ability to capture the benefit of the higher gold price. The result is an all-in sustaining cost margin of 42%, up from 31% in the previous financial year. Therefore, our margin expansion is structural, driven by prudent cost management and continued improvement in portfolio quality. This strengthens our resilience across commodity cycles and gives us the financial flexibility to fund growth and deliver sustainable returns to our shareholders. I will now hand over to Boipelo, who will discuss our financial performance.

Boipelo, over to you. Thank you, Baz.

The resilience and financial flexibility that Baz has described are evident in our results for the financial year 2026, with strong earnings, cash flows, and returns underpinning continued value creation for shareholders. I will show how strong earnings quality, cash conversion, and prudent capital management have created the flexibility to invest in growth, maintain a robust balance sheet, and continue delivering returns to shareholders. Please note that all US dollar conversions are provided in the annexures, and I will start first with the headline numbers. Financial year 2026 was a record year on many of our key financial metrics. Revenue increased by 34% to a record ZAR 100 billion. Somebody said not quite, but yes, 99.2. Net profit increased by 102% to ZAR 30 billion, and as Baz mentioned, headline earnings per share increased by 87% to 4,363 South African cents.

That step-up is evidence of the operating leverage in our portfolio. Group operating cash flow rose by 48% to ZAR 33.6 billion, and group adjusted free cash flow increased by 54% to a record ZAR 17 billion. Cash and cash equivalents remained robust at ZAR 8.6 billion, and importantly, we achieved this alongside the acquisition of CSA. Liquidity stands at ZAR 17.1 billion and net debt at ZAR 852 million, leaving net debt to EBITDA at only 0.02 times. Growth, returns, and a near ungeared balance sheet in the same year place Harmony in a very strong position. The quality of our earnings improved this year, driven by sound fundamentals. This slide unpacks some of the once-offs and non-operating impacts from our acquisition and risk management strategies. Reported earnings were affected by a number of specific items, none of which are structural.

They include a ZAR 9.6 billion gold hedge loss within revenue. Our hedging program has been applied consistently and has locked in excellent margins as set out in the hedge table in the annexures. A ZAR 2.8 billion impairment reversal at Tshepong North, Tshepong South, Doornkop, and Kusasalethu on higher commodity prices. A ZAR 700 million foreign exchange translation gain due to the US dollar denominated borrowings and strengthening of the rand. A ZAR 1 billion loss, mainly due to derivatives relating to Hidden Valley Silver. These items also include acquisition related costs of ZAR 1.4 billion, fair value adjustments on streaming arrangements of ZAR 900 million, and finance costs of ZAR 1.6 billion, and taxation of ZAR 8.9 billion. This is the cost of growth and the consequence of improved profitability. Underneath all of this, the cost base performed in line with plan.

The net pre-tax impact of these items was approximately ZAR 17 per share. Our cash operating cost increases were predictable, controlled, and in line with plan. Excluding CSA and royalties, group operating costs increased by only 7%, comfortably below our planned mining inflation of 10%. Within that, labor, our largest single component, increased 8%, and we have two years remaining on the current wage agreement. Consumables increased by 6%, and our diesel exposure remains limited, with most of our operations supplied by Eskom. Electricity increased by 16%, which we continue to mitigate through the renewable energy program. The headline increase of 14% reflects higher royalties, which rose 77% on stronger profitability and the inclusion of CSA. This reflects a more profitable and growing business. The same discipline kept all-in sustaining costs under control, which we see in the next slide. Gold all-in sustaining costs came in comfortably within guidance.