Harmony Gold Profits Up 16%, Despite 9% Production Drop

gold

VENTURES AFRICA – Harmony Gold today released results for the quarter ended December 31 2012, revealing strong profits despite overall gold production decreasing.

Operating profits for the quarter were up by 16 percent, reaching 1.6 billion Rand ($ 179 million), which the company explained was attributable largely to a drop in cash operating costs, compounded by a rise in the gold price received.

Headline earnings per share also saw a substantial increase of 28 percent to 1.58 Rand ($0.177).

The company noted that the price of gold had also shown favourable tendencies in the quarter, the rand per kilogram unit cost for the quarter ended December 2012 increasing by 6 percent to 310,858 Rand/kg ($ 34,783) from 294,404 Rand/kg ($ 32,952) in the previous quarter.

Meanwhile, underground recovered grade increased for the third consecutive quarter from 4,52g/t to 4.77g/t, representing a 6 per cent quarter-on-quarter rise.

However, the actual level of gold output declined in the December quarter by 9 percent- achieving 9,074 kg of output- as compared to previous periods, with Harmony pointing to the stoppages occasioned by illegal strike actions as the reason for the drop in production.

“A 6 percent increase in underground grade quarter on quarter to 4.77g/t and a 9 percent increase in the Rand gold price received to R479 801/kg, contributed to a 16 percent increase in the operating profit to R1.6 billion, notwithstanding the negative impact on operating performance due to labour disruptions at Kusasalethu. Overall a strong financial quarter for Harmony,” commented Chief Executive Officer Graham Briggs, summarising the results.