South Africa’s Harmony Gold posted a 31,8% rise in third-quarter headline earnings per share (EPS) to 58 cents on Wednesday, on a stronger gold price, better grades and cost controls.
Harmony, the world’s fifth-biggest gold producer, said it achieved the growth despite lower production in the quarter to end-March, while non-operational earnings boosted its profit.
Headline EPS of 58 cents compared with 44 cents for the period to end-December 2006 and a loss of 48 cents loss per share for the year-earlier quarter to March 2006.
Headline earnings, the key profit measure in South Africa, strips out capital, non-trading and certain extraordinary items.
Nine analysts polled by Reuters had said the headline EPS would rise 23% from the previous quarter to 54 cents on average. Their forecasts were in a range of 42 to 82 cents.
Despite the steady quarterly performance, analysts said this had to be put into the context of coming off a low base after several years of rising costs and weaker grades, and some noted the results had been boosted by non-operational income.
Harmony said it had sold 1,2-million Gold Fields shares in the open market, realising R156,8-million and a profit of R1-million.
The company said it had benefited from the higher gold price and various development activities in the past 15 months compared with the year-ago period, despite lower production, which fell 2,5%.
”The results are reasonable considering where Harmony is coming from, mainly they have received a better gold price, controlled costs and improved their grades but still its is nothing to get too excited about,” Mark Madeyeski, an analyst at Afrifocus Securities said.
Harmony also gave a rosy outlook, saying organic growth of its assets will make its portfolio more profitable and robust. ”These projects are on schedule and should begin contributing to our bottom line within the 2008 financial year through to the end of 2010,” the company said in a statement. — Reuters