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South Africa’s Harmony Gold first-half profit soars; reinstates dividend

* Harmony H1 profit up 211%

* Higher gold prices cushion COVID-19 impact on miners

* Reinstates first dividend since 2017

* Shares in Harmony rise (Adds share price, context on peers dividend payouts)

By Tanisha Heiberg

JOHANNESBURG, Feb 23 (Reuters) – South Africa’s Harmony Gold posted a more than three-fold rise in first-half profit and reinstated its dividend on Tuesday, following a surge in gold prices and the inclusion of the Mponeng mine into its portfolio.

The Johannesburg-listed miner declared an interim dividend of 110 cents, reinstating it for the first time since 2017.

Shares in Harmony gained more than 4% at market open, outpacing sector peers which rose 1.19%.

Harmony joins bullion miners AngloGold Ashanti, Newmont and Barrick Gold, which have also hiked payouts to shareholders.

Higher bullion prices, which reached a record in August last year, offered miners a lifeline following production disruptions because of the COVID-19 pandemic. Harmony saw a 31% rise in average gold prices during the six-month period to Dec. 31.

“The exceptional performance achieved in the first half of FY21 substantiates the growth strategy that we set out to pursue at the beginning of 2016. Through astute acquisitions, we have successfully added quality ounces to our portfolio and de-risked our asset portfolio,” Chief Executive Officer Peter Steenkamp said.

Harmony reported headline earnings per share of 775 cents, compared with 249 cents a year earlier.

Revenue for the half-year rose 39% to 21.6 billion rand ($1.48 billion) from 15.5 billion rand a year earlier.

The miner, which has operations in Papua New Guinea too, said gold output during the six months rose 8% to 745,347 ounces, compared with 688,379 ounces a year earlier following the addition of the Mponeng mine in South Africa to its portfolio.

Harmony assumed full ownership of Mponeng – the world’s deepest mine – from rival AngloGold Ashanti in October.

The acquisition also boosted Harmony’s mining grade and cash flow, the company said.

Harmony said it recorded a one-time gain of 1.153 billion rand on the bargain purchase of the Mponeng operations and related assets. ($1 = 14.6167 rand) (Reporting by Tanisha Heiberg; Editing by Kim Coghill, Rashmi Aich and Barbara Lewis)


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