Harmony profits increase

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GRAHAM_BRIGGS INDEPENDENT MEDIA Chief executive of Harmony Gold Graham Briggs.

Harmony Gold Mining Company (HAR) has reported an almost doubling in its headline earnings per share to 551 SA cents for the year ended June 2012 – or 71 US cents – from 223 cents a year ago – or 31 US cents.

For the June quarter‚ however‚ it reported a headline loss of 20 SA cents after HEPS of 234 cents for the March quarter. This was due to an increase in the deferred tax rates as a result of improved life of mine plans‚ increased exploration expenditure‚ an increase in depreciation and amortisation as well as a change in estimate of gold in lock-up‚ primarily at St Helena plant‚ Steyn plant and Kalgold‚ Harmony noted.

Year on year operating profit was up 80% to R5.9 billion – or US$759 million‚ while for the June quarter‚ operating profit rose 24% to R1.4 billion.

Annual gold production was down 2% at 1.275 million ounces‚ while June quarter production rose 14% to 320‚351oz driven by higher tonnage and improved grade.

The group declared a final dividend of 50 cents‚ for a total dividend of 90 cents for the year.

CEO Graham Briggs said with respect to production‚ the June quarter compared well to the first and second quarter of financial year 2012 and proved that the operations can do better through focused planning and execution of the plan.

Cash operating cost per unit improved by 5% quarter on quarter‚ at R279 719/kg (US$1‚071/oz). Total operating costs were higher‚ mainly due to an increase in electricity tariffs and consumables.

For the year‚ cash operating cost per kilogram of gold produced increased by 20% to R270 918/kg‚ while cash operating costs in US$/oz terms only increased by 8% at US$1085/oz as a function of the weakening of the R/US$ exchange rate by 11% to R/US$7.77.

A net profit of R2.6 billion(US$333 million) was generated for the year – this represents a four-fold increase on the R617 million (US$86 million) profit recorded in 2011. Net profit for the quarter decreased to R47 million (US$6 million)‚ mainly due to year-end deferred tax adjustments.

Resource potential at Wafi-Golpu continues to improve with on-going drilling results from the resource definition programme being extremely encouraging. The results of the Golpu pre-feasibility study will be shared with the market on 29 August. - I-Net Bridge

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