Harmony Gold Mining Co. Ltd.
) recorded a net loss of 20 cents per share in fourth-quarter
fiscal 2013 (ended Jun 30, 2013), compared with earnings of 2
cents per share recorded in the year-ago quarter.
For fiscal 2013, the company recorded a net income of 5
cents per share, compared with earnings of 74 cents per share
recorded in fiscal 2012.
On a reported basis, Harmony Gold logged a net loss from
continuing operations of $370 million in the fourth quarter as
against net loss from continuing operations of $8 million in the
prior-year quarter. The loss resulted from $289 million of
impairment charges related to the reduction in the U.S. dollar,
gold and silver prices, and Hidden Valley's poor production
performance. The loss also resulted from a deferred tax asset
expense of $55 million, which was recorded following the
de-recognition of the Hidden Valley deferred tax asset as it is
no longer deemed recoverable in the current gold price
For the full year, Harmony Gold recorded a net loss from
continuing operations of $303 million as against net income from
continuing operations of $266 million in 2012. The loss resulted
mainly due to the impairment of the Hidden Valley asset and labor
disruptions at Kusasalethu and its subsequent temporary
Revenues and Costs
Revenues decreased roughly 24% year over year to $369 million
in the fourth quarter from $485 million registered in the
year-ago quarter. For fiscal 2013, revenues decreased 7.7% to
$1,803 million from $1,953 million in 2012.
Gold production increased 12% year over year to 276,109 ounces
(oz), primarily due to the step-up of production at Kusasalethu,
after the labor unrest at the mine during the second to fourth
quarters of the financial year. However, for the full year, gold
production decreased 2.5% year over year to 1,137,297 oz from
1,166,203 oz primarily due to the labor disruptions at
Kusasalethu during Dec 2012, Mar 2013 and Jun 2013 quarters.
Cost of sales increased 59.6% year over year to $653 million
in the fourth quarter. For full-year 2013, cost of sales
increased 19.5% to $1,866 million from $1,561 million in
Gross loss amounted to $284 million in the reported quarter
compared with a gross profit of $76 million registered in the
year-ago quarter. For the full year, gross loss amounted to $63
million from $392 million in 2012.
Cash and cash equivalents decreased 3.2% to $209 million as of
Jun 30, 2013 from $216 million as of Jun 30, 2012.
Cash flow generated from operating activities was $10 million
as of Jun 30, 2013, compared with $126 million as of Jun 30,
2012. For fiscal 2013, cash flow from operating activities was
$325 million compared with $545 million for fiscal 2012.
Harmony Gold is making good progress with the cost cutting
project, Project 400. The company has reduced its capital
expenditure guidance for fiscal 2014 by R2.1 billion ($207
million) - a R650 million ($64 million) reduction in
year-over-year capital spending.Corporate and service costs
have been trimmed by R450 million ($44 million). The capital
expenditure savings were mainly due to less capital being spent
in Papua New Guinea (PNG). The company's strategy has been
consistent to optimize operational delivery, grow cash flow and
share profits with all its stakeholders.
Harmony Gold, which is among the prominent gold miners along
Barrick Gold Corporation
Newmont Mining Corporation
), has world-class mines in South Africa and PNG.
Harmony Gold currently carries a Zacks Rank #5 (Strong Sell).
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