Harmony Gold Mining Co. Ltd.
) recorded earnings of 1 cent per share in third-quarter fiscal
2014 (ended Mar 31, 2014) compared with loss of 5 cents per share
recorded in the year ago quarter and a loss of 2 cents in
second-quarter fiscal 2014.
Revenues and Costs
Revenues decreased roughly 10.4% year over year to $354 million
in the third quarter from $395 million registered in the year-ago
quarter and declined 11.9% sequentially.
Gold production increased 8.7% year over year to 269,035 ounces
(oz). However, gold production decreased 12% from 305,913 oz
recorded in the previous quarter. The sequential decline was a
result of production stoppages at Doornkop due to an accident in
Feb 2014, flooding of the shaft bottom at the Joel mine, and a
slower turnaround and technical issues at the Kusasalethu
Operating profit for the third quarter was $1 million compared
with operating loss of $20 million a year ago and a loss of $12
million in the previous quarter.
Gold ounces sold rose 13.3% year over year to 273,344 oz.
However, gold ounces sold decreased 13.2% from 315,014 oz recorded
in the prior quarter.
Cost of sales decreased 9.5% year over year to $332 million in
the third quarter. Cash operating costs decreased 21.9% year over
year to $987 per oz but increased 4% sequentially from $949 per oz.
All-in-sustaining costs also went up 0.2% to $1,224 oz from $1,222
per ounce recorded in the prior quarter.
Cash and cash equivalents decreased 43.5% to $190 million as of
Mar 31, 2014, from $336 million as of Mar 31, 2013. Cash flow
generated from operating activities was $70 million as of Mar 31,
2014, compared with $23 million as of Mar 31, 2013.
Harmony Gold has made several structural changes in the company
which will enable management to take necessary actions for the
unplanned events which are likely to hinder production. The
company's planning strategy will shift the focus toward
de-bottlenecking and optimization, which are expected to increase
the company's margins. Harmony Gold remains committed to increasing
its profits and cash flow to enable it to pay dividends in
Harmony Gold currently carries a Zacks Rank #2 (Buy).
Other stocks in the gold mining industry worth considering
AngloGold Ashanti Ltd.
Gold Fields Ltd.
Lake Shore Gold Corp.
). While AngloGold and Gold Fields carry a Zacks Rank #1 (Strong
Buy), Lake Shore Gold holds a Zacks Rank #2 (Buy).
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