HMY — Harmony Gold Mining Company Limited

Summary of Harmoney Corp Limited Q2 2026 Earnings Call

1. Key Financial Results and Metrics

• Statutory NPAT: $6.1 million, a 202% increase year-over-year, surpassing the entire FY '25 profit.
• Cash NPAT: Also $6.1 million, up 166% from the previous year.
• Return on Equity (ROE): 31%, significantly higher than 13% in the same half last year.
• Loan Book Growth: Up 9% overall to $857 million, with a notable 17% growth in Australia and a 5% increase in New Zealand (in local currency).
• Net Interest Margin (NIM): Improved to 10.3%, up 130 basis points from the previous year.
• Credit Losses: Stable at 3.9%, with 90-plus day arrears improving to 58 basis points.
• Cost-to-Income Ratio: Maintained at a competitive 19%.

2. Strategic Updates and Business Highlights

• Stellare 2.0: The platform's successful deployment has driven significant loan book growth and efficiency gains.
• Product Expansion: Focus on auto lending, with an 18% increase in the vehicle loan book. Plans for a mobile app to enhance customer experience and streamline loan access.
• Customer Flywheel: Emphasis on building long-term relationships with customers, resulting in a 150% increase in borrowing over time.
• Funding Strength: Successfully refinanced corporate debt with a Big-4 bank and maintained warehouse facilities totaling approximately $1 billion.

3. Forward Guidance and Outlook

• Upgraded FY '26 Cash NPAT Guidance: Increased by $1 million to $13 million, representing a 128% increase from last year.
• Loan Book Target: Expected to exceed $900 million by year-end, with a sustained NIM around 10%.
• Long-term Growth: Confidence in continued strong profit growth driven by scalable operations and product innovations.

4. Bad News, Challenges, or Points of Concern

• Economic Sensitivity: While the company is not currently concerned about rising funding costs, potential macroeconomic downturns could impact performance.
• Competitive Pressures: Increased competition in the lending space, particularly with new product offerings, may affect margins.
• Credit Losses: Slight uptick in credit losses to 3.9%, although still within acceptable ranges; management remains vigilant about monitoring economic indicators.

5. Notable Q&A Insights

• Geographic Expansion: No immediate plans to expand beyond Australia and New Zealand; focus remains on product adjacencies.
• Mobile App Development: A pilot is expected in Q4 2026, aimed at enhancing customer engagement.
• Funding Headroom: The company has sufficient capacity to grow its loan book significantly without needing to raise equity.
• Customer Acquisition Costs: Returning customers have a lower loss rate compared to new customers, reinforcing the value of the customer flywheel.
• Market Valuation: Management expressed confidence in their growth and execution, despite current market valuations not reflecting their performance.

This summary encapsulates Harmoney's strong financial performance, strategic initiatives, and outlook while acknowledging potential challenges and insights from the Q&A session.