SA gold miners profit seen down

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IOL BR mining PIC001 Reuters.

South Africa's three top gold producers are expected to report lower quarterly earnings despite increased output after a one-off boost in the previous 3 months from a tax deferment, according to a Reuters' poll of 5 analysts.

Rising costs from climbing power rates and wages are also eating into the margins of South Africa's gold mining companies, which had to contend with a lower spot bullion price.

Gold averaged around $1,611 an ounce during the quarter to the end of June, almost 5 percent down from its average in the previous 3 months.

In rand terms, the price was little changed because of the currency's depreciation against the dollar.

World no. 3 producer AngloGold Ashanti has already flagged to the market that its earnings are expected to fall between 40 and 44 percent from the previous quarter, which could take adjusted headline earnings per share to as low as 62 cents from 111 cents.

AngloGold cited the lower gold price as well as the one-off tax credit from the previous quarter as factors behind the earnings decline despite a nine percent rise in production.

Gold Fields, the world's fourth largest gold producer, said in a guidance update that output would be up 4 percent in the quarter from the previous one to 862,000 ounces.

Smaller rival Harmony said output would rise 13 to 14 percent, driven by better grades, while cash operating costs rose 5 percent, mostly because of higher power rates. - Reuters


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