Solid results for Harmony despite strike losses

Harmony has reported a R1.4bn September quarter operating profit

Solid results for Harmony despite strike losses
Solid gold results for Harmony

Harmony Gold Mining Company (Harmony) has reported a R1.4 billion September quarter operating profit, a 9% increase quarter-on-quarter, despite strike action at its Kusasalethu mine near Carletonville, which would trim 25,000 ounces off its full-year production target of 1.3 million oz.

The strike, which involved 5 400 employees over 23 days (excluding an estimated 10 day start-up period), carried a cost of R200 million. The impact on profit was R125 million with a total opportunity cost of R325 million.

The strike, which was resolved after unions accepted a Chamber of Mines proposal to improve the wages of entry-level workers, would result in Harmony’s labour costs rising by R10 million per month.

Gold production in the quarter totalled 321 924 oz, an 8% improvement over the June quarter, a performance that was aided by an improvement in the gold price received, which, at $1 663/oz, was a 5% increase quarter-on-quarter.

Headline earnings of R529 million compared to a R27 million loss in the June quarter. Harmony’s figures included contributions from now-discontinued assets, including R89 million from Evander Mines, which Harmony is in the process of selling to Pan African Resources.

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Issue 42