Harmony earnings weather strike storm

Feb 04 2013 08:04

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Last traded 22
Change -1
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Cumulative volume 616950
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - Harmony Gold Mining Company [JSE:HAR], South Africa's third largest gold producer, said its second quarter earnings were higher despite a 9% fall in output after post-strike violence at one of its biggest South African mines forced it to halt the operation.

Headline earnings were 28% higher at 158 cents per share for the three months October to December, which beat the Reuters consensus of 102 cents.

An interim dividend of 50 cents per share has been declared.

Production in the second quarter was 291,734 ounces after it lost 25,000 ounces to an illegal strike at its Kusasalethu operations near Carletonville.

Despite relying on South Africa for more than 95% of its output, the impact on Harmony from violent wildcat strikes that crippled operations at other South African gold and platinum producers was limited to one operation.

A burst of post-strike violence and intimidation spurred by inter-union rivalry at Kusasalethu prompted the company to say it would mothball the mine, which could lead to the sacking of 6 000 employees.

After discussions with trade unions and the government earlier this month, Harmony said it was one step closer to re-opening the mine.

"I am positive about the re-opening of Kusasalethu. In six weeks we could start to produce some ore with full production closer to the end of the quarter," said chief executive Graham Briggs.

The unions and Harmony have until March 7 to decide on the future of the mine, which has historically contributed about 14% to the company's annual output of roughly 1.3 million ounces.

Harmony's shares have lost 38% of their value in the last year, compared with a 27% drop in the JSE's Gold Mining [JSE:J150] Index. 

Shares in Harmony Gold jumped 5.4% to R60.50 at the open of trade on Monday.

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harmony gold mining company  |  mining



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