Harmony Gold records half-year profit, helped by higher bullion prices

South African bullion producer Harmony Gold Mining said on Tuesday it posted an interim profit boosted by a higher average gold price, which rose by 19% during the period.

The sun sets behind a shaft outside the mining town of Carletonville, west of Johannesburg, July 7 2015. REUTERS/Siphiwe Sibeko
Headline earnings per share (HEPS) rose to 249 cents for thesix months ended Dec. 31, from a loss of 4 cents in the sameperiod a year ago.

HEPS is the main profit measure in South Africa and stripsout certain one-off items. “While a stronger gold price received continues to provide awelcome boost to our financial performance, we will focus ourefforts on what we are able to control being safety, costs andproduction,” said Peter Steenkamp, chief executive officer ofHarmony.

Production costs rose 9% for the six months because of annual and inflationary increases, higher labour costs, increased electricity costs and more consumable stores.

Net profit for the period was 1.3 billion rand, compared toa loss of 19 million rand during the year-ago period.

Gold production for the period fell 8% due to a reduction inunderground recovered grade mainly at its Kusasalethuoperations.

The miner said it had production losses following nationwidepower cuts in December.

Cash-strapped power utility Eskom is battling to keep thelights on in Africa’s most industrialised economy because ofrepeated breakdowns at its fleet of coal-fired power stations

“With little notice, Eskom declared unprecedented Level 6load-shedding on Dec. 9, 2019. It requested us, amongst manyothers, to immediately reduce electricity consumption to levelsrequired only for the maintenance of emergency services,”Harmony said.

The company said it had to cancel both a night and day shiftdue to the power cuts resulting in a production loss of around80 kilograms to 90 kilograms.

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