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Trading statement

Harmony Gold Mining Company Limited (Harmony) announces that its financial results for the quarter ending 30 June 2007 are expected to differ significantly from those of the three previous quarters as well as from the analysts’ consensus.

Shareholders are advised that Harmony expects to announce a headline loss per share of between 130 and 160 SA cents per share for the June 2007 quarter, compared with the March 2007 quarter headline profit of 58 SA cents per share. It is expected that a headline profit of between 20 and 30 SA cents per share will be reported for the 2007 financial year compared with a headline loss of 269 SA cents per share for the 2006 financial year.

This quarter-on-quarter variance is attributable to a combination of lower production and an increase in costs. Gold production is expected to be down by between 8% and 12%, mainly due to, and as previously disclosed, production incidents at Bambanani and Joel, lower grades mined at Tshepong as well as the underperformance at Mt Magnet’s underground operations in Australia. Progress on rectifying this situation will be reported at the June 2007 results presentation to the investment community.

The combination of lower production and higher cost will result in the June 2007 quarter’s cash cost per kilogram being up by between 35% and 45%. Harmony’s total cash operating costs are up by between 25% and 28% quarter-on-quarter. The company ascribes this in part to the newly installed accounting software system that resulted in some of the March quarter’s costs being captured in the June 2007 quarter and thus the average of the last six months’ cost would be a more accurate reflection of the company’s current cost base.

During the last six months, the company’s cost base increased by between 8% and 12% on the previous six months. The increase in costs is mainly due to consumables (stores) and supervisory labour and detailed plans are being implemented to address the production and cost issues.

Shareholders are advised of the resignation of the Chief Executive, Bernard Swanepoel, with immediate effect and the appointment of Graham Briggs as acting Chief Executive.

“Harmony’s management remains committed to creating shareholder value by addressing the company’s cost issues, through disciplined mining and a back to basics approach.” says acting Chief Executive Graham Briggs.

The financial information on which this trading statement is based has not been reviewed nor reported on by the company’s auditors. Due to the time taken to install new software and the need to have externally audited numbers available, the announcement of Harmony’s quarter and year-end financial results has been postponed to Monday, 27 August 2007.

Johannesburg
6 August 2007

Annual report

Integrated annual report 2016
Integrated annual report 2016

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Investor brief

Harmony Investor brief, Sep 2017
September 2017 -
Harmony Investor brief

(PDF - 6.5MB)

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