JSE-listed gold miner Harmony Gold expects its headline earnings per share (HEPS) for the financial year ended June 30 to be between 191c and 226c.

This would represent a year-on-year increase of between 12% and 32% on the HEPS of 171c reported for the prior financial year.

The company on Thursday said the higher earnings were primarily owing to increased production and profit recorded from a full year’s production from the Moab Khotsong mine, in the North West province of South Africa, and the Hidden Valley mine, in Papua New Guinea.

Harmony produced 1.44-million ounces of gold in the financial year under review – a 17% year-on-year increase. The underground recovered grade for the reporting year was 2% higher at 5.59 g/t gold, compared with the grade of 5.48 g/t gold achieved in the prior financial year.

Harmony said it also recorded lower noncash impairments year-on-year. The recorded impairments reduce the net profit of the company, but have no impact on reported cash balances and free cash flow. The company also recorded higher derivative gains in the reporting year.

An impairment of R3.9-billion was recorded in the reporting year, compared with impairments of R5.3-billion in the prior financial year.

The assets impaired in the reporting period included the Tshepong operations, Kusasalethu, Target 1, Target 3, Joel and Bambanani. The impairment was mainly driven by higher costs, which included the estimated impact of the carbon tax, and capital expenditure on exploiting the resource base.

The company’s derivative gains in the reporting year were R484-million, compared with R99-million in the prior financial year.

Harmony said the positive impact on earnings was partially offset by increased amortisation and depreciation at Hidden Valley. A depreciation charge of R1.7-billion was recorded for the mine as a result of the recapitalisation of the mine.

The operation reached commercial production at the end of the 2018 financial year, following a net investment of $175-million to mine the Stage 5 and 6 cutbacks.

Harmony’s losses a share are expected to narrow to between 447c and 547c – an improvement of between 45% and 55% on the loss of 1 003c achieved in the prior financial year.

Harmony will publish its financial results for the financial year on August 20.