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Harmony lifts earnings on tax credit

Johannesburg - Harmony Gold Mining Company [JSE:HAR], South Africa's third-largest gold producer, reported third-quarter earnings that far exceeded expectations because of a deferred tax credit that flowed to its bottom line.

Headline earnings per share were 234 cents per share for the three months to end-March, down just slightly from 242c in the previous quarter and about triple the average estimate of 75.7c in a Reuters poll of 7 analysts.

The company's earnings would have been brought back to earth if it weren't for the deferred tax credit of R652m.

"That would equal around 150c a share, and that's what did it for them," said David Davis, mining investment analyst at SBG Securities in Johannesburg.

Production was 18% lower at 281,415 ounces with a planned infrastructure upgrade at its Doornkop mine in South Africa and lower-than-expected grades at four of its other mines adding to the losses from safety-related stoppages.

Lower production pulled gross profit down 62% to R501m but this was offset by the deferred tax credit. The company also had to contend with a lower rand/gold price during the quarter.

 
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