Harmony Gold's output down 6% in third quarter

Graham Briggs, Chief Executive of Harmony Gold says steps have been taken to improve profitability and increase operating margins at Harmony's mines. Image: Harmony

Harmony's output fell 6% to 269‚035oz compared with the December quarter and its production profit fell by a similar amount to R924m. It posted headline earnings of just 12c compared with a 21c in the previous quarter.

Lower gold output contributed to pushing up the all-in sustaining cost to R426‚221/kg‚ which is 7% higher than the previous quarter. The received gold price rose by 8% to R450‚528/kg.

Harmony reported a net profit of R31m compared with a net loss of R91m in the December quarter.

Harmony took a R29m impairment on the early closure of its Steyn 2 shaft where there was increased seismic activity‚ leading to the closure of the mine six months earlier than planned.

Harmony spent R90m on retrenchment and restructuring during the quarter.

"Various structural changes have been effected which will aid in the proactive management of unplanned events‚ which have negatively affected our production‚" Chief Executive Graham Briggs said.

"In parallel‚ our revised planning strategy will shift the focus toward de-bottle-necking and optimisation‚ and should also result in an increase in the company's margins. We remain committed to increasing our profits and cash flow to enable us to pay dividends in future‚" he said.

Harmony had production setbacks at its Doornkop mine where there was an accident‚ flooding of the shaft bottom of its Joel mine‚ structural issues at Kusasalethu and lower output at Kalgold.