|
HAR
HAPS
Harmony - Review for the first quarter ended 30 September 2006
Harmony Gold Mining Company Limited
Registration number 1950/038232/06
Incorporated in the Republic of South Africa
ISIN: ZAE000015228
REVIEW FOR THE FIRST QUARTER ENDED 30 SEPTEMBER 2006
Trading Symbols
JSE Limited HAR
New York Stock Exchange, Inc. HMY
NASDAQ HMY
London Stock Exchange plc HRM
Euronext Paris HG
Euronext Brussels HMY
Berlin Stock Exchange HAM1
Issuer code HAPS
CHIEF EXECUTIVE"S REVIEW
Harmony produced a more pleasing set of results from improved production,
higher grades, a higher received rand gold price and a weaker Rand/Dollar
exchange rate which more than offset annual increases.
"Unlocking value is what we at Harmony will be focusing on during the new
financial year. I am confident that Harmony will unlock value not only through
vigilant cost containment but also by increasing production to 3.5Moz over the
next four years. Our growth performance, to be sustained by our quality assets
and our major projects, should begin contributing meaningfully in the next
financial year. The Harmony Improvement Process (HIP), aimed at addressing
current value drivers, should also improve efficiencies at all our perations."
The group reported a 38% increase in cash operating profit to R891 million
(R645 million) and a R277 million profit compared with a loss of R41 million.
Basic headline earnings of 66 cents per share for the quarter ended 30
September 2006, compared favourably with the loss of 52 cents per share for
the previous quarter.
Cash operating costs increased by 4% to R97 538/kg mainly due to the annual
increases in SA labour costs as well as seasonal higher energy costs.
Contributing factors to the improved performance of South African underground
operations included an increase in tonnes milled of 7% to 3,351 million tonnes
(3,128 million tonnes); 6% increase in grades per tonne; 9% increase in
received gold price of R143 283/kg (R131 358/kg) and a weaker R/$ exchange
rate of R7,14.
Tonnes increased by 3% at our Australian operations and yields improved with
8% from 2.4g/t in the June quarter to 2.6g/t in the September quarter. This
resulted in an increase in gold production rising from 59 291oz to 65 883oz.
Amortisation and depreciation of mining properties increased by 15% to R308
million (R267 million), driven by increased tonnes and increased development
quarter on quarter. On-going care and maintenance costs at shafts previously
closed, were lower at R20 million (R36 million).
Harmony closed out 25 000 ounces forward contracts during the quarter at a
cost of R41 million (US$5,8 million) and 10 000 ounces call options at a cost
of R14 million (US$2 million).
QUARTERLY OPERATING AND FINANCIAL RESULTS (Rand/Metric) (unaudited)
Underground production - South Africa
Quality Growth Leveraged
Ounces Projects Ounces Sub-total
Ore milled
- t"000 Sep-06 1 665 398 1 288 3 351
Jun-06 1 618 391 1 119 3 128
Gold Produced
- kg Sep-06 9 392 1 842 5 497 16 731
Jun-06 8 510 1 421 4 768 14 699
Yield
- g/tonne Sep-06 5.64 4.63 4.27 4.99
Jun-06 5.26 3.63 4.26 4.70
Cash Operating Costs
- R/kg Sep-06 81 992 123 439 117 741 98 301
Jun-06 80 454 120 626 113 074 94 920
Cash Operating Costs
- R/tonne Sep-06 463 571 503 491
Jun-06 423 438 482 446
Working Revenue
(R"000) Sep-06 1 350 838 264 626 788 244 2 403 708
Jun-06 1 124 511 191 270 628 580 1 944 361
Cash Operating Costs
(R"000) Sep-06 770 067 227 374 647 225 1 644 666
Jun-06 684 661 171 410 539 138 1 395 209
Cash Operating Profit
(R"000) Sep-06 580 771 37 252 141 019 759 042
Jun-06 439 850 19 860 89 442 549 152
Capital Expenditure
(R"000) Sep-06 179 183 193 000 91 164 463 347
Jun-06 202 265 149 954 82 743 434 962
Quality Ounces - Evander Shafts, Randfontein Cooke Shafts, Target,
Tshepong, Masimong
Growth Projects - Doornkop shaft and South Reef Project, Elandsrand shaft
and New Mine Project, Phakisa shaft, Tshepong Decline
Project
Leveraged Ounces- Bambanani, Joel, West, St Helena 8, Harmony 2,
Merriespruit 1 and 3, Unisel, Brand 3 and Orkney 2 and 4
QUARTERLY OPERATING AND FINANCIAL RESULTS (Rand/Metric) (unaudited)
South Africa South Africa Australia Harmony
Surface Total Total Total
Ore milled
- t"000 Sep-06 905 4 256 799 5 055
Jun-06 1 054 4 182 775 4 957
Gold Produced
- kg Sep-06 692 17 423 2 049 19 472
Jun-06 700 15 399 1 844 17 243
Yield
- g/tonne Sep-06 0.76 4.09 2.56 3.85
Jun-06 0.66 3.68 2.38 3.48
Cash Operating Costs
- R/kg Sep-06 95 750 98 199 91 914 97 538
Jun-06 77 184 94 112 92 760 93 968
Cash Operating Costs
- R/tonne Sep-06 73 402 236 376
Jun-06 51 347 221 327
Working Revenue
(R"000) Sep-06 105 010 2 508 718 281 490 2 790 208
Jun-06 90 119 2 034 480 230 966 2 265 446
Cash Operating Costs
(R"000) Sep-06 66 259 1 710 925 188 331 1 899 256
Jun-06 54 029 1 449 238 171 050 1 620 288
Cash Operating Profit
(R"000) Sep-06 38 751 797 793 93 159 890 952
Jun-06 36 090 585 242 59 916 645 158
Capital Expenditure
(R"000) Sep-06 1 159 464 506 112 770 577 276
Jun-06 1 388 436 350 48 423 484 773
TOTAL OPERATIONS - QUARTERLY FINANCIAL RESULTS (Rand/metric) (unaudited)
Quarter ended Quarter ended Quarter ended
30 September 30 June 30 September
2006 2006 2005
Ore milled - t"000 5 055 4 957 4 600
Gold produced - kg 19 472 17 243 19 219
Gold price received - R/kg 143 283 131 358 91 888
Cash operating costs - R/kg 97 538 93 968 85 718
R million R million R million
Revenue 2 790 2 265 1 766
Cash operating costs 1 899 1 620 1 647
Cash operating profit 891 645 119
Amortisation and depreciation of
mining properties, mine development
costs and mine plant facilities (308) (267) (244)
Corporate, administration and other
expenditure (59) (53) (56)
(Provision)/Reversal for
rehabilitation costs (2) 18 (3)
Operating profit/(loss) 522 343 (184)
Amortisation and depreciation other
than mining properties, mine development
costs and mine plant facilities (17) (19) (11)
Employment termination and
restructuring costs - (1) 13
Care and maintenance costs (20) (36) -
Share-based compensation (12) (10) (30)
Exploration expenditure (41) (35) (18)
Mark-to-market of listed investments 24 22 21
Interest paid (95) (180) (96)
Interest received 39 48 52
Other income - net 29 10 -
Gain/(Loss) on financial instruments 18 35 (115)
Loss from associates (48) (105) -
Provision for post-retirement benefits - (7) -
Reversal of impairment of fixed assets - 216 -
Profit/(Loss) before tax 399 281 (368)
Current tax - expense - (5) -
Deferred tax - (expense)/benefit (122) (317) 48
Net profit/(loss) 277 (41) (320)
Loss per share - cents *
- Basic earnings/(loss) 70 (11) (82)
- Headline earnings/(loss) 66 (52) (85)
- Fully diluted earnings/(loss) ** *** 69 (11) (82)
Dividends per share - (cents)
- Interim - - -
- Proposed final - - -
* Calculated on weighted average number of shares in issue at quarter
end September 2006: 396.8 million (June 2006: 394.9 million)
(September 2005: 392.3 million).
** Calculated on weighted average number of diluted shares in issue at
quarter end September 2006: 402.9 million (June 2006: 401.1 million)
(September 2005: 392.3 million).
*** The effect of the share options is anti-dilutive.
Reconciliation of headline profit/(loss):
Net profit/(loss) 277 (41) (320)
Adjustments:
- Profit on sale of assets (13) (12) (15)
- Profit on sale of GBS Gold
International investment (1) - -
- Impairment of fixed assets - net of
tax - (151) -
Headline profit/(loss) 263 (204) (335)
ABRIDGED BALANCE SHEET AS AT 30 SEPTEMBER 2006 (Rand)
At At At
30 September 30 June 30 September
2006 2006 2005
R million R million R million
(Unaudited) (Audited) (Unaudited)
ASSETS
Non-current assets
Property, plant and equipment 23 849 23 318 22 633
Intangible assets 2 270 2 270 2 268
Investment financial assets 2 306 2 255 4 709
Investments in associates 1 860 1 909 -
Trade and other receivables 82 107 -
30 367 29 859 29 610
Current assets
Inventories 730 666 552
Trade and other receivables 871 721 597
Income and mining taxes 25 27 27
Cash and cash equivalents 868 906 971
2 494 2 320 2 147
Total assets 32 861 32 179 31 757
EQUITY AND LIABILITIES
Share capital and reserves
Share capital 25 521 25 489 25 289
Other reserves (88) (271) (144)
Accumulated loss (1 738) (2 015) (1 701)
23 695 23 203 23 444
Non-current liabilities
Borrowings 2 637 2 591 2 464
Net deferred taxation liabilities 2 449 2 300 2 128
Deferred financial instruments 609 631 436
Provisions for other
liabilities and charges 1 009 983 938
6 704 6 505 5 966
Current liabilities
Trade and other payables 1 184 1 199 995
Accrued liabilities 264 259 298
Borrowings 1 006 1 006 1 046
Shareholders for dividends 8 7 8
2 462 2 471 2 347
Total equity and liabilities 32 861 32 179 31 757
Number of ordinary shares in
issue 397 549 945 396 934 450 393 341 194
Net asset value per share
(cents) 5 960 5 846 5 960
CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE THREE MONTHS ENDED
30 SEPTEMBER 2006 (Rand) (unaudited)
Issued share Other Retained
capital reserves earnings Total
R million R million R million R million
Balance as at 1 July 2006 25 489 (271) (2 015) 23 203
Issue of share capital 32 - - 32
Currency translation adjustment
and other - 183 - 183
Net earnings - - 277 277
Balance as at 30 September 2006 25 521 (88) (1 738) 23 695
Balance as at 1 July 2005 25 289 (587) (1 381) 23 213
Issue of share capital - - - -
Currency translation adjustment
and other - 443 - 443
Net loss - - (320) (320)
Balance as at 30 September 2005 25 289 (144) (1 701) 23 444
SUMMARISED CASH FLOW STATEMENT FOR THE THREE MONTHS ENDED
30 SEPTEMBER 2006 (Rand) (unaudited)
3 months 3 months 3 months
ended ended ended
30 September 30 September 30 June
2006 2005 2006
R million R million R million
Cash flow from operating activities
Cash generated/(utilised) by
operations 471 (184) 467
Interest and dividends received 39 52 48
Interest paid (45) (47) (59)
Income and mining taxes paid - - (4)
Cash generated/(utilised) by
operating activities 465 (179) 452
Cash flow from investing activities
Net proceeds on disposal of listed
investments 30 - -
Net additions to property, plant and
equipment (562) (350) (471)
Other investing activities - - (26)
Cash utilised by investing activities (532) (350) (497)
Cash flow from financing activities
Long-term loans repaid - (295) (1 008)
Ordinary shares issued - net of
expenses 32 - 128
Dividends paid - - (7)
Cash generated/(utilised) by
financing activities 32 (295) (887)
Foreign currency translation
adjustments (3) (35) 57
Net decrease in cash and equivalents (38) (859) (875)
Cash and equivalents - beginning of
period 906 1 830 1 781
Cash and equivalents - end of period 868 971 906
NOTES TO THE RESULTS FOR THE QUARTER ENDED 30 SEPTEMBER 2006
1. Basis of accounting
The unaudited results for the quarter have been prepared using accounting
policies that comply with International Financial Reporting Standards (IFRS).
These consolidated quarterly statements are prepared in accordance with IFRS
34, Interim Financial Reporting.
2. Commodity contracts
The Harmony Group"s outstanding commodity contracts against future production,
by type at 30 September 2006 are indicated below. The total net delta of the
hedge book at 30 September 2006 was 291 991 oz (9 082 kg).
30 June 30 June 30 June
Year 2007 2008 2009 Total
Australian
Dollar Gold:
Forward contracts Kilograms 2 862 3 110 3 110 9 082
Ounces 92 000 100 000 100 000 292 000
AUD per oz 518 518 518 518
Total commodity
contracts Kilograms 2 862 3 110 3 110 9 082
Ounces 92 000 100 000 100 000 292 000
Total net gold** Delta (kg) 2 863 3 111 3 108 9 082
Delta (oz) 92 034 100 028 99 929 291 991
These contracts are classified as speculative and the marked-to-market
movement is reflected in the income statement.
The mark-to-market of these contracts was a positive R73 million (positive
USD10 million) at 30 September 2006 (at 30 June 2006: negative R631 million or
negative USD88 million). The values at 30 September 2006 were based on a gold
price of USD599 (AUD804) per ounce, exchange rates of USD1/R7.76 and
AUD1/USD0.75 and prevailing market interest rates and volatilities at that
date. These valuations were provided by independent risk and treasury
management experts.
At 25 October 2006, the marked-to-market value of the hedge book was a
positive R58 million (positive USD7.5 million), based on a gold price of
USD584 (AUD767)per ounce, exchange rates of USD1/R7.72 and AUD1/USD0.76 and
prevailing market interest rates and volatilities at that time.
These marked-to-market valuations are not predictive of the future value of
the hedge position, nor of the future impact on the revenue of the company.
The valuation represents the cost of buying all hedge contracts at the time of
the valuation, at market prices and rates available at the time.
Harmony closed out 25 000oz forward contracts during the quarter ending 30
September 2006 at a cost of R41 million (USD5.8 million). During the quarter
ended 30 June 2006, Harmony closed out 75 000oz forward contracts at a cost of
R143 million (USD23 million).
Harmony closed out 10 000oz call options during the quarter ending 30
September 2006 at a cost of R14 million (USD2 million).
** The Delta of the hedge position indicated above, is the equivalent gold
position that would have the same marked-to- market sensitivity for a small
change in the gold price. This is calculated using the Black-Scholes option
formula with the ruling market prices, interest rates and volatilities at 30
September 2006.
CONTACT DETAILS
Harmony Gold Mining Company Limited
Corporate Office
Suite No. 1
Private Bag X1
Melrose Arch, 2076
South Africa
First Floor
4 The High Street
Melrose Arch, 2196
Johannesburg
South Africa
Telephone: +27 11 684 0140
Fax: +27 11 684 0188
Website: http://www.harmony.co.za
Directors
P T Motsepe (Chairman)*
Z B Swanepoel (Chief Executive)
F Abbott*, J A Chissano*,
Dr D S Lushaba*, F T De Buck*, M Motloba*,
N V Qangule, C M L Savage*
(*non-executive) (Mozambique)
Investor Relations
Amelia Soares
Investor Relations Manager
Telephone: +27 11 684 0146
Fax: +27 11 684 0188
Cell: +27 (0) 82 654 9241
E-mail: amelia.soares@harmony.co.za
Lizelle du Toit
Investor Relations Officer
Telephone: +27 11 684 0149
Fax: +27 11 684 0188
Cell: +27 (0) 82 465 1244
E-mail: lizelle.dutoit@harmony.co.za
Marian van der Walt
Company Secretary
Telephone: +27 11 411 2037
Fax: +27 11 411 2398
Cell: +27 (0) 82 888 1242
E-mail: marian.vanderwalt@harmony.co.za
South African Share Transfer Secretaries
Link Market Services South Africa (Proprietary) Limited
(Registration number 2000/007239/07)
5th Floor, 11 Diagonal Street
Johannesburg, 2001
PO Box 4844
Johannesburg, 2000
Telephone: +27 11 832 2652
Fax: +27 11 834 4398
United Kingdom Registrars
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Telephone: +44 870 162 3100
Fax: +44 208 639 2342
ADR Depositary
The Bank of New York
101 Barclay Street
New York, NY 10286
United States of America
Telephone: +1888-BNY ADRS
Fax: +1 212 571 3050
Trading Symbols
JSE Limited HAR
New York Stock Exchange, Inc. HMY
NASDAQ HMY
London Stock Exchange plc HRM
Euronext Paris HG
Euronext Brussels HMY
Berlin Stock Exchange HAM1
Issuer code HAPS
Registration number 1950/038232/06
Incorporated in the Republic of South Africa
ISIN: ZAE000015228
Date: 31/10/2006 08:00:37 AM Produced by the JSE SENS Department
| Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information. | |||||||||||||
| Other Profile Group sites: FundsData Online (unit trust data) | Profile Group corporate site | |||||||||||||
| [ Terms of Use | Privacy Policy | PAIA manual | FAQs/Help | Site Map | © Copyright Reserved 2026 ] | |||||||||||||
|
|||||||||||||
