Restructuring pays off for Harmony

(File, Shutterstock)
(File, Shutterstock)

Cape Town - Harmony Gold has posted a 4% increase in quarterly production profit, mainly due to cost cutting and a higher gold price.

Harmony [JSE:HAR] said in a statement on Friday its production profit increased to R643m in the March 2015 quarter compared to R618m in the previous quarter, owing to a 10% decrease in operating costs supported by a 6% increase in the average gold price received.

Harmony, the third largest gold mining company in South Africa, said gold production for the quarter to 31 March was impacted by slow start-ups after the December 2014 holidays, as well as safety stoppages.

As a result, gold production was 10% lower at 7 642 kg in the quarter under review compared with the December 2014 quarter.

Harmony reduced its headline loss per share to 60c from 114 cents in the previous quarter.

Harmony CEO Graham Briggs said the company has responded to a lower gold price – "first by rationalising our assets and then restructuring our portfolio – cutting costs, reducing labour numbers and focusing on mining only safe, profitable ounces".

He said during the next couple of months, Harmony will continue to improve the performance of its assets and restructure Masimong, Doornkop and Hidden Valley for profitability.

"We are assessing ways of funding Golpu and unlocking the true value of each of our assets, which will ensure shareholder returns in the long term,” said Briggs.

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