HomeGoldHarmony costs outweigh earnings

Harmony costs outweigh earnings

Graham Briggs,
CEO, Harmony
Johannesburg, South Africa — MININGREVIEW.COM — 31 October 2008 – South Africa’s Harmony Gold Mining Company Limited (Harmony) – fifth largest gold producer in the world – has posted a 79% fall in headline earnings per share at 8 cents for the first quarter of its 2009 financial year, well below market forecasts as operating costs rose and the metal’s price fell.
Reuters quotes Harmony as saying that despite a rise in output, operating costs rose much higher – by 15%, or US$25.19 million (R249.2 million) – compared to the June quarter. At the same time, the price of gold received fell by 3% to US$869 per ounce, undermining earnings.

Production rose 6 % to 396,803 ounces, the company added.

Harmony CEO Graham Briggs said Harmony had now embarked on the “organic growth” phase of its three-phase growth plan that would run up to June 2012. The company had previously been selling off non-core assets.

Briggs said he remained bullish about the fundamentals for the metal in the medium and longer term, citing tight supply.

Reuters reports that Harmony was expected to increase headline EPS to 59 cents for its first quarter, from 38 cents in the June quarter, according to an average of estimates provided by seven analysts.