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Harmony's (HMY) Earnings and Revenues Decline Y/Y in FY20

Harmony Gold Mining Company Limited HMY posted adjusted loss of 10 cents per share in fiscal 2020 (ended Jun 30, 2020) against adjusted earnings of 14 cents recorded a year ago.

Revenues and Costs

In fiscal 2020, revenues fell 1.6% to $1,867 million from $1,898 million registered a year ago. Average gold prices received during the fiscal rose roughly 14% year over year to $1,461 per oz.  

Gold production was 1,217,323 ounces (oz) in the fiscal, down around 15% year over year.

Cash operating costs per ounce rose around 14% to $1,099. All-in-sustaining costs (AISC) rose around 7% year over year to $1,293 per oz.

Financial Overview

At the end of fiscal 2020, cash and cash equivalents rose more than five-folds year over year to $367 million. Cash flow from operating activities fell 9.1% year over year to $300 million in the fiscal.

Net debt was $79 million at the end of fiscal 2020.

Outlook

Harmony Gold plans to produce 1.25-1.3 million oz of gold in fiscal 2021.

The company stated that it is well-positioned to gain from the expected strength of the gold price. In addition to its Tier 1 projects such as Wafi-Golpu and a pipeline of organic projects in South Africa, the company is expected to benefit from the newly-acquired assets that will boost production as conditions improve.

Price Performance

Shares of Harmony have rallied 86.2% in the past year compared with the industry’s 55.9% rise.

Zacks Rank & Key Picks

Harmony currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Eldorado Gold Corporation EGO, Kirkland Lake Gold Ltd. KL and Yamana Gold Inc. AUY, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Eldorado Gold has an expected earnings growth rate of 2,325% for 2020. The company’s shares have surged 42% in the past year.

Kirkland Lake Gold has an expected earnings growth rate of 22.6% for 2020. Its shares have returned 10.7% in the past year.

Yamana has an expected earnings growth rate of 76.9% for 2020. The company’s shares have soared 79.1% in the past year.

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