Harmony Gold swings to headline loss in Q3
The group missed market consensus on lower output and higher costs, but the CEO remains bullish on longer term gold prices
JOHANNESBURG (Reuters) -
Harmony Gold Mining Co. (HARJ.J: Quote), the world's 5th-largest listed gold miner, missed market consensus and swung into a headline loss per share in the March quarter due to lower output and higher production costs.
Harmony, ranked No. 3 in Africa with most of its mines in South Africa, said on Monday production was hit by safety related stoppages and shaft closures, but that it would focus on boosting output and enhancing gold grades and cutting costs.
The company was expected by analysts to post 22 cents in headline earnings per share -- the key profit measure in South Africa, stripping out capital, non-trading and some extraordinary items -- after reporting headline EPS of 49 cents in the December quarter.
Gold production was 10 percent lower at 333,276 ounces, with total cash costs up about 4 percent to $829 per ounce.
Harmony's Chief Executive Officer Graham Briggs said the company would seek new avenues to grow, and said it was bullish about the gold price, which fell more than half a percent on Monday, trading just above $1,200 an ounce.
"We will progress our developmental projects - our key growth drivers - and pursue further, longer-term growth through acquisition and exploration," he said in a statement. "We remain bullish about the gold market and the gold price."
Briggs said the rand's strength continued and it was uncertain whether it would remain at its current levels.
South African gold producers, which sell their gold in dollars and pay their costs in rand, saw little benefit from a record gold price after the rand gold price gained one percent to 267,300 rand a kg from 264,500 rand per kg.
Africa's top three gold producers were expected by analysts to report weaker March quarter earnings largely due to lower production and rising costs against a marginal rise in the dollar and rand price of bullion.
Bigger rivals AngloGold Ashanti (ANGJ.J: Quote) and Gold Fields (GFIJ.J: Quote) -- ranked 3rd- and 4th-largest gold miners and the top two in the continent respectively -- posted weaker earnings in results issued last week.
The gold mining companies are expected to face a rough ride in the June quarter due to higher electricity tariffs and a new revenue based royalty that will pile onto their cost base.
(Reporting by James Macharia)
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