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Harmony financial results for the quarter ended 31 December 2006

Harmony Gold Mining Company Ltd (NYSE/NASDAQ: HMY; JSE: HAR) today announced net earnings of R468 million for the December 2006 quarter compared with R277 million in the September quarter 2006 and R22 million for December 2005.

Net earnings reported for the December 2006 quarter, in US dollars, were US$64 million compared with US$37 million in the September quarter and US$2 million in the December 2005 quarter.

The group reported a 15.3% decline in cash operating profit to R755 million (R891 million). Basic headline earnings of 44 SA cents per share for the December 2006 quarter was 33.3% lower than the 66 SA cents per share reported for the September 2006 quarter and 75 SA cents per share loss for the December 2005 quarter.

South African underground grades decreased by 4.4% from 5.0g/t to 4.78g/t, resulting in gold production being 3,8% lower at 18 724kg (19 472kg). Cash operating costs increased by 5.9% to R104 056/kg (R98 302/kg). South African development metres for the group increased by 11.6% with Masimong, Merriespruit and Bambanani as the main contributors.

The growth projects reported an excellent quarter across the board and costs improved by 13.5% to R106 782/kg (R123 439/kg). This overall cost improvement was mainly as a result of Elandsrand’s 26.1% improvement in grades.

The Australian operations reported a decrease of 37% in operating profit of A$10.6 million, compared with A$16.9 million in the previous quarter, primarily due to an 7.8% decrease in gold production from 65 877oz in the September quarter to 60 707oz this quarter.

The group settled 50 000 ounces of hedged forward positions during the December quarter at a cost of R82.9 million or A$14.7 million. These out-of-the-money hedge positions, inherited with the acquisition of Hill 50 Gold NL, had an average strike price of A$518.

On 1 December 2006 Harmony accepted Goldfields’ offer of 35 GFI shares for every 100 Western Areas shares we held. Harmony had acquired the 29.2% stake (44 985 939 shares) in Western Areas at a cost of R44.23 per share on 9 March 2006. The investment was carried at fair value of R42.01 per share in Harmony’s books. The proceeds on the share conversion amounts to R47.26 per share, resulting in a before tax profit of R5.25 per share.

Bernard Swanepoel, Chief Executive of Harmony said: “The Group’s higher unit costs this quarter are a result of lower yields on most of our quality mines and are frustrating at a time when we are harnessing all efforts to reduce costs. Over the next six months, we will continue to develop at these significantly higher levels in order to create sufficient available face length which will not only enable us to increase grades by some 10 to 15 %, but will also put us in a position where we will have more consistent production results. This should enable us to have reduced unit costs and improved performance.”

For more details contact:

Bernard Swanepoel
Chief Executive
+27(0)83 303 9922

Amelia Soares
General Manager, Investor Relations
Tel. + 27 11 684 0146
+27(0)82 654 9241

Lizelle du Toit
Investor Relations Officer
+27(0)82 465 1244

Annual report

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Integrated annual report 2017

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Investor brief

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

(PDF - 6.5MB)

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