Investors cheer Harmony results

Johannesburg - Investors cheered Harmony Gold Mining’s interim results for the six months ended June 30 2016 on Wednesday, sending the share price up more than 5% after the gold miner posted a net profit of R949m on the back of a 21% increase in the R/kg gold price.

By 12:29 the shares changed hands at R60 a piece, 4.13% higher than Tuesday’s closing price.

The company reported headline earnings per share (Heps) of R2.21, net profit of R949m and declared a dividend of 50c.

Harmony CEO Peter Steenkamp said in a statement the group has a proactive approach to safety and health and continues to differentiate itself

Harmony [JSE:HAR] reported a revenue increase of 19%. It achieved its production guidance of approximately 1.1 million ounces. Net debt was reduced by 54% to R1.08bn.

Production profit increased to R5.084bn, up 81% from R2.802bn in the 2015 financial year after accounting for a 7% increase in cash operating costs (R821m). Overall, cost increases were lower than inflation.

“Having turned around the previous year’s headline loss to headline earnings of R2.21, we felt it prudent to declare a dividend of 50c (about 4 US cents). It was indeed a good year for Harmony,”, concluded Steenkamp.

Bloomberg reported that gold was trading lower on Wednesday morning ahead of the release of the US Federal Reserve’s minutes from its July meeting after central bank officials signalled that US interest rates could be increased at least once this year.

Gold has advanced in 2016 as the Fed has yet to add to last year’s rise, which was the first in almost a decade.

New York Fed President William Dudley warned investors they are underestimating the likelihood of increases, and Atlanta Fed chief Dennis Lockhart said he’s confident growth is accelerating, setting the stage for one or two rises this year. The comments boosted the probability of a hike in December to 51%.

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