Harmony Gold Mining Co. soars on record earnings

Harmony Gold Mining Co. Ltd ((HMY)) has held its Q2 earnings call. Read on for the main highlights of the call.

Harmony Gold Mining Co. Ltd’s latest earnings call struck a distinctly bullish tone, with management delivering a clear beat-and-raise story. Profit growth, margin expansion and strong returns underscored the power of its Stellare 2.0 platform, while credit and funding metrics remained comfortably within targets, leaving only manageable headwinds around FX, provisioning and early-stage products.

Record Half-Year Profit Surge

Harmony posted record statutory and cash NPAT of $6.1m for H1 FY26, a 202% jump year on year that already surpasses last year’s full‑year cash NPAT of $5.7m. Management highlighted that cash NPAT growth of 166% reflects both volume and margin gains rather than one‑off items.

Return on Equity Jumps to Over 30%

Annualized return on equity for the half leapt to 31% from 13% a year earlier, signaling a step‑change in capital efficiency. The company framed this as evidence that its model scales with limited additional equity, a key attraction for growth‑focused investors.

Loan Book Expansion Led by Australia

The group loan book grew 9% to $857m, with Australia up 17% and now representing 61% of the portfolio, while New Zealand rose 5% in local currency. Management expects the loan book to top $900m by year‑end, despite FX translation dampening reported growth.

Revenue Growth and Wider Margins

Revenue climbed 12% to $71.9m as the portfolio interest rate held at 17.2% while funding costs fell to 7%. Net interest margin expanded 130 basis points to 10.3%, and risk‑adjusted income improved 110 basis points to 6.4%, underscoring stronger unit economics.

Stellare 2.0 Boosts Originations and Leverage

Management credited Stellare 2.0 as a major growth engine, with New Zealand originations up 49% and other markets seeing a roughly 27% uplift. Automation‑driven efficiency and better conversion rates are driving operating leverage, helping profits grow faster than the loan book.

Market-Leading Cost Efficiency

The cost‑to‑income ratio improved to about 18.5%, better than last year’s 18.9% and positioned as market‑leading. This low expense base suggests the platform can support a substantially larger book without proportionate cost increases.

Credit Quality and Collections Strength

Credit performance remained solid, with 90‑plus‑day arrears improving to 58 basis points from 64, well below Australian market averages. Credit losses are 3.9%, still inside the 3%–4% target range, indicating a controlled risk profile despite rapid growth.

Healthy Funding and Liquidity Backstop

Harmony refinanced corporate debt with an Australian Big‑4 bank and now runs warehouse facilities with three Big‑4s totaling about $1b of capacity. The half closed with $24m of unrestricted cash after repaying $7.5m of corporate debt, supporting both growth and resilience.

Upgraded FY26 Profit Guidance

Management lifted FY26 cash NPAT guidance to $13m, an 8% upgrade that would mark a 128% rise on last year’s record result. The outlook implies further operating leverage as Stellare 2.0, disciplined pricing and a growing loan book drive sustained profitability.

Powerful Customer Flywheel Economics

Customer behavior data shows an average first loan of $18k, with clients borrowing an additional 150% over time. With roughly $1k acquisition cost per new customer and near‑zero cost on repeat lending, combined with 4.8‑out‑of‑5 satisfaction from over 60,000 reviews, the franchise appears sticky and scalable.

New Product and Distribution Initiatives

An auto loan product is gaining traction, with the vehicle book up 18% year on year, while a mobile app is in pilot ahead of a targeted launch. Management also flagged revolving credit and embedded finance partnerships as future growth levers that could deepen customer relationships.

Capital Efficiency and Balance Sheet Scalability

Borrowings now fund about 96% of the loan book, requiring only around $34m of equity‑like cash. Management believes current cash and entitlements can support growth to roughly $1.5b in loans without new equity, and that each extra $1m of profit can underpin about $25m of additional lending.

Managing Higher Losses, FX and Provisions

There was a slight uptick in credit losses to 3.9% and a small trimming of expected loss provisioning from 4.5% to 4.3%, which reduces the buffer and warrants monitoring. A weaker New Zealand dollar also shaved about $25m off the reported loan book, illustrating the FX sensitivity of headline metrics.

Funding and Market Perception Risks

While access to three Big‑4 bank warehouses is a strength, it also concentrates funding in specific channels and counterparties, a risk investors will track. Management also noted a persistent valuation discount versus peers, suggesting the market wants a longer track record before fully pricing in the growth story.

Upgraded Outlook Underpinned by Stellare 2.0

Guidance now calls for FY26 cash NPAT of $13m, supported by a year‑end loan book above $900m, a roughly 10% NIM and risk‑adjusted income of around 6%. The company is targeting an ROE near 31%, banking on Stellare 2.0, disciplined credit and capital‑light growth to sustain its current momentum.

Harmony’s earnings call painted the picture of a lender hitting its stride, with record profits, robust returns and a scalable digital platform outweighing manageable risks. For investors, the combination of upgraded guidance, strong unit economics and clear operating leverage makes the stock a compelling growth‑at‑a‑reasonable‑risk story, assuming execution stays on track.