South Africa’s Harmony Gold Mining Co Ltd. reported on Monday earnings well below market expectations, sending shares in the country’s third-largest gold producer three percent lower.
Johannesburg-based Harmony said earnings per share had dropped to 247 cents in the September quarter from 402 cents in the previous quarter.
Analysts had forecast earnings of about 382 cents.
Shares in the miner ebbed to an intra-day low of R125 after the results, and were down 2,3% at R127 by 1020 GMT, underperforming a 0,5% gain in gold shares.
Harmony said cash operating profit fell to R950-million in the September quarter from R1,068-billion rand in the previous period. A stronger gold price was offset by higher operating costs, including the miner’s 8,2% effective annual wage increase.
But gold output increased, with the firm producing 796 497 ounces of gold in the period compared to 784 155 ounces (24 390 kg) in the previous quarter. Harmony said it was on track to produce 3,1-million ounces in the current financial year.
The company, which has a reputation for acquiring and turning around marginal operations, said it saw more acquisition opportunities over the next 12 to 24 months.
”I believe that conditions favourable for Harmony to achieve further acquisitions will present themselves as the target assets experience the pressure of working cost increases,” Chief Executive Bernard Swanepoel said in a statement. – Reuters