Johannesburg - Africa's top-three gold producers are expected to report mixed quarterly earnings, but output is seen improving for each after power shortages in South Africa caused shortfalls in the previous quarter to end-March.
"This quarter should see a recovery in South Africa mine production after the production losses due to the January power outage and holiday breaks suffered in the previous quarter," JP Morgan's Allan Cooke and Steve Shepherd said in a research note.
Both AngloGold Ashanti and Gold Fields, the top two African producers respectively, have forecast higher production. Harmony, Africa's third-biggest producer, is also expected to boost output after restructuring its operations, analysts said.
Mines in South Africa have been operating below full power since outages forced five days of shutdowns in late January, driving up precious metals prices and raising fears of job losses and slower growth.
Analysts said the three companies will, unlike the preceding quarter, see less benefit from the price of gold, which dropped
3% to $895 per ounce. The rand/gold price was about flat at R223 000 rand per kg from R224 000 rand per kg.
They were also keen to see how costs would affect the firms.
"Costs will be another obvious concern going forward, the ever-rising costs in mining is a big problem," Stephen Roelofse, gold analyst at Metropolitan Asset Managers said.
One-off $1.1bn loss for Anglogold
AngloGold, the world's third-biggest gold producer, said this month it expects second-quarter output of 1.25 million ounces, up 5% quarter-on-quarter, at cash costs of $434 per ounce from $430 per ounce previously.
Average estimates from six analysts surveyed by Reuters forecast a big adjusted headline loss per share of US206c after sharply restructuring its forward sales, from headline adjusted earnings per share of US37c.
The group suffered a one-off loss of $1.1bn after selling off 39% or 4.4 million ounces of its gold hedge.
The earnings forecast ranged between US21c to a loss of US349c. The earnings are adjusted to exclude non-realised financial effects from derivatives.
Safety at Gold Fields in focus
Gold Fields, the world's No. 4 gold producer, is expected to post unchanged adjusted headline earnings per share of 155c for the fourth quarter, an average of six analysts estimates showed. Their estimates ranged from 130c to 188c.
Earnings are adjusted to exclude the effects of financial instruments and foreign debt.
Gold Fields has forecast group output rising 4.5%, and one analyst expected output to rise to 930 120 ounces.
"The group is forecast to declare a final dividend of 170c per share from 95c, the only dividend to be paid by the South African gold producers this quarter," JP Morgan said.
Analysts were keen to hear what the company was doing to improve safety at its South African mines, after the mineworkers union threatened to hold a strike at Gold Fields over safety.
Harmony seen sustaining profit run
Harmony, the world's No. 5 gold producer, is expected to sustain its profit run, after swinging back into profit in the preceding quarter, which brought an end to a run of losses.
The firm is expected to post a jump in headline earnings per share to 118c for the fourth quarter from 42c, an average of estimates by six analysts showed. Their estimates ranged between 70c and 150c.
Headline earnings is the key profit measure in South Africa, stripping out capital, non-trading and some extraordinary items.
JP Morgan forecast operating profit for the quarter at just over R1bn, and a 20% rise in output to 399 000 ounces at R137 000 per kg.