Harmony Gold Mining Co. Ltd.
(
HMY
) recorded net earnings of 30 cents per share in the second quarter
of 2012, significantly higher than 16 cents per share in the
previous quarter and 11 cents per share in the year-ago quarter.
However, results were in line with the Zacks Consensus
Estimate.
Revenue
Revenues were up 8.2% sequentially and 37.1% annually to $595
million, driven by a rise in the gold price received and an
increase in gold sold.
Costs
Gold production increased by 5% sequentially to 344,592 ounces.
Cost of sales plunged 7.8% sequentially to $412 million, but jumped
13.2% over the previous year quarter. Total production cost was
$339 million in the reported quarter versus $367 million in the
previous quarter and $308 million in the comparable year-ago
quarter. Gross profit in the quarter was $183 million versus $103
million in the previous quarter and $70 million in the year-ago
quarter.
Financial Overview
Cash and cash equivalents amounted to $149 million as of
December 31, 2011 versus $127 million as of December 31, 2010.
Cash flow generated from operating activities was $173 million
as of December 31, 2011 versus $62 million as of December 31,
2010.
Outlook
The company is showing a significant progress both in the growth
of resources as well as diversity. Harmony remains focused on
its long term strategic goal of achieving sustainable profitability
and delivering shareholder value.
The company remains bullish on the gold price and expects gold
price in dollar terms to continue to strengthen, as the
fundamentals that drove the gold price up are still in place and
the global financial markets have not yet stabilized.
Harmony has significantly improved the quality of its
production, which it will continue to do with better cash costs and
free cash flow in future. The company also has several world-class
mines in South Africa, which are currently in the build-up phase
and these together with Hidden Valley, will be significant
contributors to Harmony's set production targets. However, the
company faces stiff competition from
Arcelor Mittal
(
MT
) and
POSCO
(
PKX
).
Currently, we have a long-term (6 months and higher) Neutral
recommendation on the stock.
HARMONY GOLD (
HMY
): Free Stock Analysis Report
ARCELOR MITTAL (
MT
): Free Stock Analysis Report
POSCO-ADR (
PKX
): Free Stock Analysis Report
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