Wrap Text
Results for the first quarter ended
30 September 2013
Harmony Gold Mining Company Limited
('Harmony' or 'Company')
Incorporated in the Republic of South Africa
Registration number 1950/038232/06
JSE share code: HAR
NYSE share code: HMY
ISIN: ZAE000015228
Q1 FY14
Results for the first quarter ended
30 September 2013
KEY FEATURES
Quarter on quarter
- Significant increase in gold production for a second consecutive quarter
- 12% increase in gold production
- 6% increase in tonnes milled
- 4% increase in total underground recovered grade
- Kusasalethu close to normal production levels
- Reduced unit costs quarter on quarter
- cash operating costs decreased by 7% to R324 272/kg (US$1 013/oz)
- reduced all-in sustaining costs by 14% from R471 146/kg to R404 694/kg
(19% reduction from US$1 551/oz to US$1 264/oz)
- Operating profit¹ increased by 55% from R671 million to more
than R1 billion (46% increase from US$71 million to
US$104 million)
All figures represent continuing operations unless stated otherwise
1. Operating profit is comparable to the term production profit in the segment report in the financial
statements and not to the operating profit line in the income statement
RESULTS FOR THE FIRST QUARTER ENDED 30 SEPTEMBER 2013
Quarter Quarter* Q-on-Q
September June variance
2013 2013 %
Gold produced kg 9 635 8 588 12
oz 309 773 276 109 12
Cash operating costs R/kg 324 272 347 456 7
US$/oz 1 013 1 144 11
Gold sold kg 9 353 8 146 15
oz 300 703 261 901 15
Underground grade g/t 4.55 4.37 4
All-in sustaining costs R/kg 404 694 471 146 14
US$/oz 1 264 1 551 19
Gold price received R/kg 429 566 427 534
US$/oz 1 342 1 407 (5)
Operating profit(1)* R million 1 037 671 55
US$ million 104 71 46
Basic earnings/(loss) per share* SAc/s 3 (808) >100
USc/s (86) >100
Headline profit/(loss)* Rm 20 (802) >100
US$m 2 (85) >100
Headline earnings/(loss) per share* SAc/s 5 (185) >100
USc/s 0.5 (20) >100
Exchange rate R/US$ 9.96 9.45 5
(1) Operating profit is comparable to the term production profit in the segment report in the financial statements and not to the
operating profit line in the income statement
* Comparative figures in these line items have been restated as a result of the adoption of IFRIC 20 Stripping Costs in the Production
Phase of a Surface Mine
Shareholder information
Issued ordinary share capital at
30 September 2013 435 289 890
Issued ordinary share capital at
30 June 2013 435 289 890
Market capitalisation
At 30 September 2013 (ZARm) 15 083
At 30 September 2013 (US$m) 1 499
At 30 June 2013 (ZARm) 15 562
At 30 June 2013 (US$m) 1 568
Harmony ordinary share and ADR prices
12-month high (1 October 2012
30 September 2013) for ordinary shares R75.64
12-month low (1 October 2012
30 September 2013) for ordinary shares R32.74
12-month high (1 October 2012
30 September 2013) for ADRs US$8.96
12-month low (1 October 2012
30 September 2013) for ADRs US$3.30
Free float 100%
ADR ratio 1:1
JSE Limited HAR
Range for quarter
(1 July - 30 September 2013 closing prices) R32.74 R42.47
Average daily volume for the quarter
(1 July - 30 September 2013) 1 680 746 shares
Range for quarter
(1 April - 30 June 2013 closing prices) R33.47 R59.11
Average daily volume for the quarter
(1 April - 30 June 2013) 2 099 857 shares
New York Stock Exchange including
other US trading platforms HMY
Range for quarter US$3.30
(1 July 30 September 2013 closing prices) US$4.33
Average daily volume for the quarter
(1 July - 30 September 2013) 3 824 973
Range for quarter US$3.30
(1 April 30 June 2013 closing prices) US$6.38
Average daily volume for the quarter
(1 April - 30 June 2013) 3 302 649
Investors' calendar 2013/2014
Annual General Meeting 5 December 2013
Q2 and 6 months ended FY14 results
presentation 3 February 2014
CONTACT DETAILS
CONTACT DETAILS
Corporate Office
Randfontein Office Park
PO Box 2, Randfontein, 1760, South Africa
Corner Main Reef Road/Ward Avenue
Randfontein, 1759, South Africa
Telephone: +27 11 411 2000
Website: www.harmony.co.za
Directors
P T Motsepe* Chairman
M Motloba*^ Deputy Chairman
G P Briggs Chief Executive Officer
F Abbott Financial Director
H E Mashego Executive Director
F F T De Buck*^ Lead independent director
J A Chissano*(1)^, K V Dicks*^, Dr D S Lushaba*^,
C Markus*^, M Msimang*^, K T Nondumo*^,
V P Pillay *^, J Wetton*^, A J Wilkens*
* Non-executive
^ Independent
(1) Mozambican
Investor relations team
Email: HarmonyIR@harmony.co.za
Henrika Basterfield
Investor Relations Manager
Tel: +27 (0)11 411 2314
Mobile: +27 (0)82 759 1775
Email: henrika@harmony.co.za
Marian van der Walt
Executive: Corporate and Investor Relations
Tel: +27 (0)11 411 2037
Mobile: +27 (0)82 888 1242
Email: marian@harmony.co.za
Company Secretary
Riana Bisschoff
Telephone: +27 (0)11 411 6020
Mobile: +27 (0)83 629 4706
E-mail: riana.bisschoff@harmony.co.za
South African Share Transfer Secretaries
Link Market Services South Africa (Proprietary) Limited
(Registration number 2000/007239/07)
13th Floor, Rennie House
19 Ameshoff Street
Braamfontein, 2001
PO Box 4844, Johannesburg, 2000, South Africa
Telephone: +27 86 154 6572
Fax: +27 86 674 4381
ADR Depositary
Deutsche Bank Trust Company Americas
c/o American Stock Transfer and Trust Company
Peck Slip Station
PO Box 2050, New York, NY 10272-2050
Email queries: db@amstock.com
Toll Free: +1-800-937-5449
Intl: +1-718-921-8137
Fax: +1-718-921-8334
Sponsor
JP Morgan Equities South Africa (Pty) Ltd
1 Fricker Road, corner Hurlingham Road
Illovo
Johannesburg, 2196
Private Bag X9936, Sandton, 2146, South Africa
Telephone: +27 11 507 0300
Fax: +27 11 507 0503
Trading Symbols
JSE Limited: HAR
New York Stock Exchange, Inc: HMY
Euronext, Brussels: HMY
Berlin Stock Exchange: HAM1
Registration number
1950/038232/06
Incorporated in the Republic of South Africa
ISIN
ZAE000015228
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements within the
meaning of the United States Private Securities Litigation Reform Act of
1995 with respect to Harmony's financial condition, results of operations,
business strategies, operating efficiencies, competitive positions, growth
opportunities for existing services, plans and objectives of management,
markets for stock and other matters. Statements in this quarter that are
not historical facts are 'forward-looking statements' for the purpose of
the safe harbour provided by Section 21E of the U.S. Securities Exchange
Act of 1934, as amended, and Section 27A of the U.S. Securities Act of
1933, as amended. Forward-looking statements are statements that are
not historical facts.
These statements include financial projections and estimates and their
underlying assumptions, statements regarding plans, objectives and
expectations with respect to future operations, products and services, and
statements regarding future performance. Forward-looking statements
are generally identified by the words 'expect', 'anticipates', 'believes',
'intends', 'estimates' and similar expressions. These statements are only
predictions. All forward-looking statements involve a number of risks,
uncertainties and other factors and we cannot assure you that such
statements will prove to be correct. Risks, uncertainties and other factors
could cause actual events or results to differ from those expressed or
implied by the forward-looking statements.
These forward-looking statements, including, among others, those relating
to the future business prospects, revenues and income of Harmony,
wherever they may occur in this quarterly report and the exhibits to this
quarterly report, are necessarily estimates reflecting the best judgement
of the senior management of Harmony and involve a number of risks
and uncertainties that could cause actual results to differ materially from
those suggested by the forward-looking statements. As a consequence,
these forward-looking statements should be considered in light of various
important factors, including those set forth in this quarterly report.
Important factors that could cause actual results to differ materially from
estimates or projections contained in the forward-looking statements
include, without limitation: overall economic and business conditions
in the countries in which we operate; the ability to achieve anticipated
efficiencies and other cost-savings in connection with past and future
acquisitions; increases or decreases in the market price of gold; the
occurrence of hazards associated with underground and surface gold
mining; the occurrence of labour disruptions; availability, terms and
deployment of capital; changes in government regulations, particularly
mining rights and environmental regulations; fluctuations in exchange
rates; currency devaluations and other macro-economic monetary policies;
and socio-economic instability in the countries in which we operate.
Harmony's Integrated Annual Report,
Notice of Annual General Meeting and its
Annual Report filed on a Form 20F with the United States'
Securities and Exchange Commission for the year ended
30 June 2013 were released on 25 October 2013.
www.harmony.co.za/investors
Chief executive officer's review
Despite short-term gold price volatility, long-term fundamentals remain
in place for continued growth in commodity demand. Since the financial
crash of 2008, investment demand has been among the gold market's
principal drivers. The R/kg gold price has been static in the past two
quarters and we are expecting this trend to continue in the short term.
As gold prices have weakened, gold mines world-wide remain under
pressure with their rising costs. Our only means of remaining profitable
is to reduce costs, improve our productivity and produce more gold. We
believe that Harmony is well placed to meet these challenges.
We have been an acquisitive company, known for reinvesting in our
assets to improve their performance. Our strategic advantages include:
- increasing gold grades
- lowest rand/tonne South African producer
- free cash flow
- unhedged
- strong balance sheet low debt
- geared to SA currency 93% of our gold is mined in South Africa
1. SAFETY
The South African operations experienced a challenging safety quarter
with a regression in safety performance.
It is with deep regret that I report that four people were fatality injured
in four separate incidences. They were Tiodosio Munguambe (a team
leader) and Mr Carlitos Uetela (development team member) both
from Doornkop; and Thembekile Mapeyi (development team member)
and Oscar Madosi (an engineering assistant) both from Kusasalethu.
My sincere condolences go to the families, friends and colleagues of
these men.
Safety risk management is one of the main pillars in the Harmony safety
strategy and is the main building block in the journey towards proactive
safety management and ultimately to zero harm. Management and
employees play an equally important role in the effective functioning
of the safety risk management system and specifically with regards
to issue-based risk management and continuous risk management.
During the past quarter management has paid a lot of attention to
poor performing operations. In addition, all baseline risk assessments
are currently part of a review process.
Due to the fatalities reported, the Fatality Injury Frequency Rate (FIFR)
per million hours worked regressed year on year from 0.11 to 0.19 and
quarter on quarter from 0.10 to 0.19.
During the quarter, the chief executive officer and various other
executives continued high level safety audits at the operations.
Significant safety achievements during the quarter were:
- Unisel recorded 12 months of being fatality free
- Tshepong achieved more than 3 000 000 rail bound equipment
fatality free shifts
- Tshepong achieved 2 000 000 fall of ground fatality free shifts
- Doornkop achieved 6 500 000 fall of ground fatality free shifts
2. OPERATIONAL RESULTS
Gold production for the September 2013 quarter increased by 12% to
9 635kg from 8 588kg in the June 2013 quarter. This was as a result
of improved recovered grades at most of the underground operations
and Kusasalethu building up to normal production after the temporary
closure of the shaft earlier this year.
Operations that showed an improvement during the September 2013
quarter were Kusasalethu, Tshepong, Target 1, Phakisa, Hidden Valley
and Unisel.
The 12% increase in production resulted in a significant increase in
operating profit of 55% for the September 2013 quarter, increasing
from R671 million in the June 2013 quarter to R1 037 million in the
September 2013 quarter.
The rand gold price received remained steady with only a 0.4% increase
to R429 566/kg (R427 534/kg in the June 2013 quarter). Quarter on
quarter the US dollar gold price decreased by 5% from US$1 407/oz
in the June 2013 quarter to US$1 342/oz in the September quarter.
The rand/dollar exchange rate weakened by 5% from R9.45/US$ in the
previous quarter to R9.96/US$ in the September 2013 quarter.
Cash operating costs in the September 2013 quarter increased by
R140 million compared to the June 2013 quarter. This was mainly as
a result of a R38 million increase in wages (due to the annual wage
increase), as well as a R147 million increase in electricity costs (due
to winter tariffs). These increases in costs were partially offset by a
R57 million saving at Hidden Valley.
Due to the increase in gold produced for the September 2013 quarter
the rand per kilogram (cash cost) decreased by 7% from R347 456/kg
in the June 2013 quarter to R324 272/kg in the quarter under review.
Total capital expenditure for the September 2013 quarter decreased
by R183 million or 23% quarter on quarter to R622 million. Most
operations recorded a decrease in capital expenditure with a major
saving of R89 million at Hidden Valley.
3. FINANCIAL OVERVIEW
Revenue
Revenue improved from R3 483 million in the previous quarter to
R4 018 million, driven by a 15% increase in gold sales and stable gold
prices in rand terms at R429 566/kg.
Restructuring costs
Restructuring and employment termination costs of R94 million were
recorded in the current quarter which should result in more long-term
savings going forward.
Exploration costs
Due to the repositioning of the Wafi-Golpu project and other cost-
saving initiatives in respect of the project, total exploration expenditure
decreased from R219 million to R142 million for the quarter.
Gain on financial instruments
The gain on financial instruments is due to the increase in fair value
of the investments in the various group rehabilitation trust funds.
A portion of these funds is invested in Equity Linked Deposits, which
increased in value as the market rose. These gains can be attributed
to an increase in the JSE shareholder weighted top 40 index (SWIX 40)
during the quarter.
Property, plant and equipment
Mining assets have decreased during the quarter as the Papua New
Guinean currency (PGK) depreciated against all currencies towards the
end of the quarter. Against the rand, it weakened from R4.49/PGK to
R3.87/PGK resulting in lower rand equivalent balances reported on the
balance sheet.
Borrowings and cash
The long-term portion of borrowings increased during the quarter as a
further $60 million was drawn against the US dollar syndicated revolving
credit facility. During the same period cash and cash equivalents
increased by R199 million to R2 288 million resulting in a net debt of
R871 million.
4. ALL-IN SUSTAINING COSTS MEASURES (WORLD GOLD COUNCIL)
The World Gold Council (WGC) released a guidance note in June 2013
on the calculation of 'all-in sustaining costs' which was
developed by members of the council to create a better understanding
of the overall costs associated with producing gold.
The 'all-in sustaining costs' is an extension of the existing 'cash cost'
metrics and incorporates costs related to sustaining production. The
'all-in costs' includes additional costs, for example, exploration and new
project capital, which reflect the varying costs of producing gold over
the life-cycle of a mine.
Harmony has decided to adopt the all-in sustaining costs method and we will apply
it to our calculations as from the September 2013 quarter onwards. For
comparison purposes, we will be reporting on both our cash operating
cost (R/kg or US$/oz) and the all-in sustaining costs in the future.
Harmony recorded an all-in sustaining cost of R404 694/kg for
the September 2013 quarter, a 14% improvement compared to the
R471 146/kg recorded in the June 2013 quarter, due to higher gold
production.
5. EMPLOYEE RELATIONS
Two year wage agreement
A new two year wage agreement was signed on 10 September 2013.
In summary the agreement is as follows:
- Category 4 and 5 employees, and rock drill operators received an
increase of 8% in basic wages as from 1 July 2013 and a CPI plus
1% increase as from 1 July 2014;
- Category 6 to 8 employees, miners and artisans, and officials,
received an increase of 7.5% in basic wages as from 1 July 2013 and
a CPI plus 0.5% increase as from 1 July 2014;
- the current monthly living out allowance increased to R1 820 per
month on 1 September 2013 and will increase to R2 000 per month
on 1 September 2014.
AMCU Recognition Agreement
On 4 October 2013, the recognition agreement with the Association
of Mineworkers and Construction Union (AMCU), representing about
75% of the workforce at Kusasalethu, was signed at Kusasalethu. All
the other recognised unions at the mine will continue to operate.
6. JOEL AND BEATRIX OPERATIONS EXCHANGE MINING RIGHT
AREAS
Background
Harmony's Joel mining right is contiguous to Sibanye Gold Limited's
(Sibanye) Beatrix mining right, which has resulted in a number of
discussions between the parties over the last couple of years on the
possibility of exchanging some mining right portions for the benefit
of both parties. These discussions have finally culminated in agreed
commercial terms during the quarter. As a result, an agreement was
finalised and signed by Harmony and Sibanye. The main condition
precedent is the approval by the Department of Mineral Resources of
the respective section 102 applications. These approvals are expected to
be obtained before the end of June 2014.
Commercial terms
Joel will exchange two portions of its mining right for two portions of
Beatrix's mining right, as well as acquiring two additional portions from
Beatrix.
The exchange portions are to be transferred between the parties for
the same value.
The purchase consideration of the further two portions to be acquired
by Joel will be in the form of a royalty of 3% on gold revenue generated
from these two portions.
Motivation for the exchange and acquisition
The areas that Joel will relinquish are difficult to access from Joel and
have been deemed uneconomical, while the portions that Joel will be
acquiring are accessible and will increase the current life of mine.
7. WAFI-GOLPU
Drilling during the quarter focused on brownfield drilling, Golpu resource
definition, potential shaft location and infrastructure geotechnical
drilling. The drill programme for derisking the lower mine blocks has
been designed, scheduled and has commenced. This programme will
address confidence levels in the lower mining block.
Golpu resource definition drilling of the upper and lower mining blocks
during the quarter has confirmed porphyry and associated grade
through the southern upper and lower mining blocks.
IN CONCLUSION
All the original, marginal Harmony assets have been closed. Harmony
has built new mines, enabling it to access new and higher grade mining
areas and reducing the time it takes crews to get to the face. Growing
our margins are all about reducing our costs, improving productivity
and increasing our gold production. Major capital expenditure has been
spent; we have a strong balance sheet with low debt and look forward
to the value that Golpu will add in future. We remain firm believers in
gold's ability to preserve value.
We are confident that these strategic foundations will support
sustainable growth for all stakeholders as we deliver on the full potential
of our asset base.
Graham Briggs
Chief executive officer
OPERATIONAL RESULTS (Rand/Metric) (US$/Imperial)
South Africa
Underground production Surface production
Three Total Total Total
months Kusasa- Bamba- Under- Total South Hidden Continuing
ended lethu Doornkop Phakisa Tshepong Masimong Target 1 nani Joel Unisel Target 3 Steyn 2 ground Phoenix Dumps Kalgold* Surface Africa Valley* Operations
Ore milled - t'000 Sep-13 329 236 156 249 189 191 51 159 108 82 12 1 762 1 544 873 364 2 781 4 543 503 5 046
Jun-13 212 242 133 211 210 179 55 151 114 73 12 1 592 1 471 879 367 2 717 4 309 457 4 766
Gold produced - kg Sep-13 1 272 765 755 1 049 758 1 081 623 697 476 392 146 8 014 225 297 324 846 8 860 775 9 635
Jun-13 688 859 583 815 839 897 614 699 427 419 121 6 961 202 346 357 905 7 866 722 8 588
Gold produced - oz Sep-13 40 896 24 595 24 274 33 726 24 370 34 755 20 030 22 409 15 304 12 603 4 694 257 656 7 234 9 549 10 417 27 200 284 856 24 917 309 773
Jun-13 22 120 27 617 18 744 26 203 26 974 28 839 19 741 22 473 13 728 13 471 3 890 223 800 6 494 11 124 11 478 29 096 252 896 23 213 276 109
Yield - g/tonne Sep-13 3.87 3.24 4.84 4.21 4.01 5.66 12.22 4.38 4.41 4.78 12.17 4.55 0.15 0.34 0.89 0.30 1.95 1.54 1.91
Jun-13 3.25 3.55 4.38 3.86 4.00 5.01 11.16 4.63 3.75 5.74 10.08 4.37 0.14 0.39 0.97 0.33 1.83 1.58 1.80
Cash operating
costs R/kg Sep-13 378 360 372 256 359 825 337 704 339 471 240 274 220 342 258 561 320 525 373 446 233 966 319 395 272 796 344 552 325 694 318 246 319 286 381 274 324 272
Jun-13 577 337 332 516 444 168 418 310 289 795 281 223 201 467 243 308 331 747 297 759 257 736 340 394 317 396 332 601 259 894 300 526 335 807 474 366 347 456
Cash operating
costs $/oz Sep-13 1 182 1 163 1 124 1 055 1 060 750 688 808 1 001 1 166 731 998 852 1 076 1 017 994 997 1 191 1 013
Jun-13 1 900 1 094 1 462 1 377 954 926 663 801 1 092 980 848 1 120 1 045 1 095 855 989 1 105 1 561 1 144
Cash operating
costs R/tonne Sep-13 1 463 1 207 1 741 1 423 1 361 1 360 2 692 1 133 1 413 1 785 2 847 1 453 40 117 290 97 623 587 619
Jun-13 1 874 1 180 1 947 1 616 1 158 1 409 2 249 1 126 1 243 1 709 2 599 1 488 44 131 253 100 613 749 626
Gold sold - Kg Sep-13 1 098 796 742 1 031 745 986 613 693 467 358 144 7 673 221 288 340 849 8 522 831 9 353
Jun-13 427 793 568 793 816 934 597 700 415 436 118 6 597 205 358 301 864 7 461 685 8 146
Gold sold - oz Sep-13 35 301 25 592 23 856 33 147 23 952 31 701 19 708 22 280 15 014 11 510 4 630 246 691 7 105 9 259 10 931 27 295 273 986 26 717 300 703
Jun-13 13 728 25 496 18 262 25 496 26 235 30 029 19 194 22 505 13 343 14 018 3 794 212 100 6 591 11 510 9 677 27 778 239 878 22 023 261 901
Revenue (R'000) Sep-13 471 091 342 177 318 272 442 614 319 160 423 239 263 048 297 079 200 535 153 520 61 532 3 292 267 95 253 124 269 146 634 366 156 3 658 423 359 304 4 017 727
Jun-13 175 728 335 584 243 101 339 801 349 828 409 201 256 002 300 268 178 132 190 917 50 327 2 828 889 86 460 151 774 124 248 362 482 3 191 371 291 325 3 482 696
Cash operating
costs (R'000) Sep-13 481 274 284 776 271 668 354 251 257 319 259 736 137 273 180 217 152 570 146 391 34 159 2 559 634 61 379 102 332 105 525 269 236 2 828 870 295 487 3 124 357
Jun-13 397 208 285 631 258 950 340 923 243 138 252 257 123 701 170 072 141 656 124 761 31 186 2 369 483 64 114 115 080 92 782 271 976 2 641 459 342 492 2 983 951
Inventory
movement (R'000) Sep-13 (86 317) 3 625 (6 345) (8 697) 476 (34 582) (1 659) (1 589) (2 391) (19 548) (1 020) (158 047) (317) (4 017) 2 559 (1 775) (159 822) 16 283 (143 539)
Jun-13 (99 945) (29 205) (6 908) (3 191) (8 033) 9 755 (11 144) (2 898) (3 786) 4 827 (727) (151 255) (1 659) 7 156 (17 223) (11 726) (162 981) (8 871) (171 852)
Operating costs (R'000) Sep-13 394 957 288 401 265 323 345 554 257 795 225 154 135 614 178 628 150 179 126 843 33 139 2 401 587 61 062 98 315 108 084 267 461 2 669 048 311 770 2 980 818
Jun-13 297 263 256 426 252 042 337 732 235 105 262 012 112 557 167 174 137 870 129 588 30 459 2 218 228 62 455 122 236 75 559 260 250 2 478 478 333 621 2 812 099
Operating profit (R'000) Sep-13 76 134 53 776 52 949 97 060 61 365 198 085 127 434 118 451 50 356 26 677 28 393 890 680 34 191 25 954 38 550 98 695 989 375 47 534 1 036 909
Jun-13 (121 535) 79 158 (8 941) 2 069 114 723 147 189 143 445 133 094 40 262 61 329 19 868 610 661 24 005 29 538 48 689 102 232 712 893 (42 296) 670 597
Operating profit ($'000) Sep-13 7 644 5 400 5 317 9 746 6 161 19 890 12 797 11 894 5 057 2 679 2 850 89 435 3 434 2 606 3 871 9 911 99 346 4 772 104 118
Jun-13 (12 861) 8 376 (946) 219 12 139 15 574 15 178 14 084 4 261 6 489 2 102 64 615 2 541 3 126 5 152 10 819 75 434 (4 474) 70 960
Capital
expenditure (R'000) Sep-13 120 048 60 100 90 762 67 598 37 819 61 509 31 922 42 056 17 228 35 411 562 565 015 - 129 8 023 8 152 573 167 48 478 621 645
Jun-13 147 930 63 733 95 553 83 853 46 164 69 279 26 381 43 495 20 999 41 158 921 639 466 12 746 1 865 12 369 26 980 666 446 137 986 804 432
Capital
expenditure ($'000) Sep-13 12 055 6 035 9 114 6 788 3 798 6 176 3 205 4 223 1 730 3 556 56 56 736 - 13 806 819 57 555 4 868 62 423
Jun-13 15 653 6 744 10 111 8 873 4 885 7 331 2 791 4 602 2 222 4 355 97 67 664 1 349 197 1 309 2 855 70 519 14 601 85 120
Adjusted
operating costs R/kg Sep-13 375 072 375 492 364 217 341 375 362 285 232 532 226 822 263 371 329 937 359 871 235 119 321 965 276 299 341 372 321 027 316 285 321 399 376 717 326 314
Jun-13 732 861 333 064 454 083 433 351 305 007 285 676 196 748 246 946 363 348 300 832 264 541 348 312 305 537 341 441 257 401 303 645 343 231 492 639 355 795
Adjusted
operating costs $/oz Sep-13 1 171 1 173 1 138 1 066 1 132 726 708 823 1 031 1 124 734 1 006 863 1 066 1 003 988 1 004 1 177 1 019
Jun-13 2 412 1 096 1 494 1 426 1 004 940 648 813 1 196 990 871 1 146 1 006 1 124 847 999 1 130 1 621 1 171
All-in sustaining
costs R/kg Sep-13 499 528 453 515 497 604 418 042 428 681 306 233 248 992 299 968 380 985 470 106 253 014 400 649 276 299 352 628 359 453 335 492 393 978 514 593 404 694
Jun-13 1 102 726 416 276 622 482 551 053 383 178 369 164 229 074 299 834 431 788 404 417 293 966 452 606 309 922 361 909 316 771 333 849 438 528 826 415 471 146
All-in sustaining
costs $/oz Sep-13 1 560 1 416 1 554 1 306 1 339 956 778 937 1 190 1 468 790 1 251 863 1 101 1 123 1 048 1 230 1 607 1 264
Jun-13 3 629 1 370 2 049 1 814 1 261 1 215 754 987 1 421 1 331 967 1 490 1 020 1 191 1 043 1 099 1 443 2 720 1 551
Gold price Sep-13 429 045 429 871 428 938 429 306 428 403 429 248 429 116 428 685 429 411 428 827 427 306 429 072 431 009 431 490 431 276 431 279 429 292 432 375 429 566
received Jun-13 411 541 423 183 427 995 428 501 428 711 438 117 428 814 428 954 429 234 437 883 426 500 428 814 421 756 423 950 412 784 419 539 427 740 425 292 427 534
* Comparative figures for these operations have been restated as a result of the adoption of IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine.
Refer to note 2 of the Financial Statements.
Commentary on operational results
Harmony's upward trend in its gold production continued for a second
consecutive quarter. Gold production was 12% higher quarter-on-
quarter at 9 635kg, largely due to an 11% increase in underground
tonnes milled and a 4% increase in underground recovered grade to
4.55g/t. The quarter included five days of protected industrial action
which affected all the South African operations, except for Kusasalethu.
During the September quarter there were increases in labour costs
(following the new two year wage agreement) and electricity costs
(winter tariffs). These cost increases were more than offset by the
increased production and savings in overall costs, resulting in our cash
cost per kilogram being 7% lower at R324 272/kg quarter-on-quarter
and a 14% reduction in all-in sustaining costs to R404 694/kg.
SOUTH AFRICAN OPERATIONS
Kusasalethu
The build-up at Kusasalethu continued during the quarter. Production
was however hampered by two fatalities that occurred during the
quarter in two separate incidents.
On 4 October 2013, the recognition agreement with the Association
of Mineworkers and Construction Union (AMCU), representing about
75% of the workforce at Kusasalethu, was signed and management
and the various unions are working together to ensure a sustainable
future for the mine.
The previous quarter's loss was turned into an operating profit of
R76 million in the September 2013 quarter testimony of the efforts of
management and the unions to turn around the mine's performance.
During the December 2013 quarter, management will continue to focus
on building production at the mine.
Doornkop
Doornkop did not perform in line with its plan in the past quarter,
mainly due to a 9% decrease in recovered grade to 3.24g/t and the
impact of two fatalities at the mine, which resulted in a decline in gold
production of 11% to 765kg. Tonnes milled decreased by 3% quarter
on quarter to 236 000t. The decrease in grade is due to Doornkop not
achieving the planned mining mix.
Focus in the next quarter will be to improve the recovered grade and
the safety at the mine.
Phakisa
Phakisa continues to build up its production in line with its plan and
recorded a second quarter of increased production, turning its operating
loss recorded in the previous quarter into an operating profit.
An increase of 17% in tonnes milled (at 156 000t) and recovered grade
of 11% (at 4.84g/t) during the quarter, resulted in a 30% increase
in gold production at 755kg quarter on quarter. The improvements
in temperatures in some of the working places attributed to the
improvements in production.
During the December 2013 quarter, the remedial work at Freddies No. 3
ventilation shaft, which will improve the ventilation constraints at the
mine, will continue.
Tshepong
Tshepong bounced back during the quarter and generated free cash
flow after capital of R19 million as it increased tonnes milled by 18%
at 249 000t and recovered grade by 9% at 4.21g/t, resulting in a 29%
increase in gold production from 815kg in the previous quarter to
1 049kg in the September 2013 quarter.
The Tshepong team will continue their focus on improving stoping face
length and reef development.
Masimong
Masimong had a challenging quarter as volumes decreased by 10%
quarter on quarter to 189 000t while grade remained stable at 4.01g/t.
This mine's underperformance resulted in a 10% decrease in gold
production.
Our focus during the December 2013 quarter will be on managing
the face length and focusing on clean mining in order to improve
production.
Target 1
Target 1 generated free operational cash flow of R101 million, after
capital during the September 2013 quarter. Gold production increased
by 21% quarter on quarter to 1 081kg, due to increased volumes of
191 000t at a 13% improved recovered grade of 5.66g/t. The recovered
grade is currently higher than the 5.13g/t average grade guided for
financial year 2014 (FY14) and we expect this mine to continue its good
performance in the next quarter.
Bambanani
Gold production increased by 2% due to a 10% increase in recovered
grade at 12.22g/t. Bambanani is currently mining at a recovered grade
higher than the average guidance given of 9.74g/t.
Improving safety and increasing square metres will be the focus of
management at Bambanani during the December 2013 quarter.
Joel
Gold production remained stable quarter on quarter at 697kg, as
the 5% decrease in recovered grade was offset by a 5% increase
in tonnage. The recovered grade was lower due to mining a higher
channel width than planned and therefore not achieving the planned
face grade during the quarter.
During the next quarter, Joel will focus on monitoring and achieving the
planned belt grade.
Unisel
Recovered grade at Unisel increased by 18% quarter on quarter, due to
improved face grades, a decrease in stoping widths and a decrease in
waste mining.
Target 3
A 6% decrease in gold production for the quarter is mainly due to
lower recovered grade, as a result of a decrease in face grade during
the quarter.
Increasing the amount of Basal reef panels and improving the
environmental conditions in the sub-shaft of the mine will be the main
focus areas at Target 3 during the next quarter.
Steyn 2
Due to a decrease in stoping widths and cleaner mining practices,
Steyn 2 increased its recovered grade for the quarter by 21%, resulting
in a 21% increase in gold production. Tonnes milled remained steady
quarter-on-quarter.
Phoenix (tailings)
The 11% increase in gold production is mainly due to an increase in
the plant head grade, while a 5% increase in tonnes milled supported
the increase further.
Surface dumps
The decreases in gold production at the surface dumps are due to the
improved reef deliveries from the underground operations. Volumes
treated are dependent on available plant capacity after reef deliveries.
Plant capacity was well utilised to maximise the gold output.
Kalgold
Kalgold's gold production decreased by 9% quarter on quarter due
to challenges with the crushing system at the plant, such as the
maintenance of conveyor belts, splicing of belts and refurbishment of
conveyer belts chutes. Costs and capital were well controlled and are
below the average guided for FY14.
In the next quarters, management will focus on delivering the planned
plant infrastructure.
INTERNATIONAL OPERATIONS
Hidden Valley (held in Morobe Mining Joint Ventures 50% of
attributable production reflected)
Hidden Valley increased its gold production by 7% (775kg) quarter on
quarter, due to a 10% increase in mill throughput and a 3% increase in
gold recoveries, partly offset by a 3% reduction in gold grade.
The commissioning of the crusher is largely complete, configuration
changes will be implemented during the December 2013 quarter and
are expected to improve throughput and feed reliability to the mill.
An operating profit of R48 million was generated during the quarter.
During the December 2013 quarter, management aims to reduce costs
further and increase the amount of tonnes crushed and conveyed.
CONDENSED CONSOLIDATED INCOME STATEMENTS (Rand)
Quarter ended Year ended
30 September 30 June 30 September 30 June
2013 2013 2012 2013
(Unaudited) (Unaudited) (Unaudited) (Audited)
Figures in million Note (Restated)* (Restated)* (Restated)*
Continuing operations
Revenue 4 018 3 483 4 278 15 902
Cost of sales 3 (3 735) (6 171) (3 511) (16 448)
Production costs (2 981) (2 812) (2 878) (11 321)
Amortisation and depreciation (577) (531) (494) (2 001)
Impairment of assets (2 733) (2 733)
Other items (177) (95) (139) (393)
Gross profit/(loss) 283 (2 688) 767 (546)
Corporate, administration and other expenditure (108) (127) (106) (465)
Social investment expenditure (38) (57) (20) (127)
Exploration expenditure (142) (219) (136) (673)
Profit on sale of property, plant and equipment 55 139
Other income/(expenses) net 1 (169) 3 (350)
Operating (loss)/profit (4) (3 260) 563 (2 022)
Profit from associates 3
Impairment of investments (7) (48) (88)
Net gain/(loss) on financial instruments 74 (8) 74 173
Investment income 45 67 33 185
Finance cost (60) (57) (58) (256)
Profit/(loss) before taxation 51 (3 258) 564 (2 008)
Taxation (38) (239) (152) (655)
Normal taxation (49) 78 (111) (271)
Deferred taxation 11 (317) (41) (384)
Net profit/(loss) from continuing operations 13 (3 497) 412 (2 663)
Discontinued operations
Profit from discontinued operations 89 314
Net profit/(loss) for the period 13 (3 497) 501 (2 349)
Attributable to:
Owners of the parent 13 (3 497) 501 (2 349)
Earnings/(loss) per ordinary share (cents) 5
Earnings/(loss) from continuing operations 3 (808) 95 (616)
Earnings from discontinued operations 21 73
Total earnings/(loss) 3 (808) 116 (543)
Diluted earnings/(loss) per ordinary share (cents) 5
Earnings/(loss) from continuing operations 3 (808) 95 (616)
Earnings from discontinued operations 21 73
Total diluted earnings/(loss) 3 (808) 116 (543)
* The comparative periods have been restated following the adoption of IFRIC 20. Refer to note 2 for details.
The accompanying notes are an integral part of these condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Rand)
Quarter ended Year ended
30 September 30 June 30 September 30 June
2013 2013 2012 2013
(Unaudited) (Unaudited) (Unaudited) (Audited)
Figures in million (Restated)* (Restated)* (Restated)*
Net profit/(loss) for the period 13 (3 497) 501 (2 349)
Other comprehensive (loss)/income for the period,
net of income tax (695) 25 25 737
Foreign exchange translation (694) 26 25 742
Movements on investments (1) (1) (5)
Total comprehensive (loss)/income for the period (682) (3 472) 526 (1 612)
Attributable to:
Owners of the parent (682) (3 472) 526 (1 612)
* The comparative periods have been restated following the adoption of IFRIC 20. Refer to note 2 for details.
The accompanying notes are an integral part of these condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Rand) (Unaudited)
for the three months ended 30 September 2013
Share Other Retained
Figures in million capital reserves earnings Total
Balance 30 June 2013 as previously reported 28 325 3 464 522 32 311
Restatement for IFRIC 20 (22) (74) (96)
Restated balance 30 June 2013 28 325 3 442 448 32 215
Share-based payments 43 43
Net profit for the period 13 13
Other comprehensive loss for the period (695) (695)
Balance 30 September 2013 28 325 2 790 461 31 576
Balance 30 June 2012 as previously reported 28 331 2 444 3 307 34 082
Restatement for IFRIC 20 (15) (94) (109)
Restated balance 30 June 2012 28 331 2 429 3 213 33 973
Share-based payments 45 45
Net profit for the period 501 501
Other comprehensive income for the period 25 25
Dividends paid (218) (218)
Balance 30 September 2012 28 331 2 499 3 496 34 326
The accompanying notes are an integral part of these condensed consolidated financial statements.
The unaudited condensed consolidated financial statements for the three months ended 30 September 2013 have been
prepared by Harmony Gold Mining Company Limited's corporate reporting team headed by Mr Herman Perry. This process
was supervised by the financial director, Mr Frank Abbott, and approved by the board of Harmony Gold Mining Company
Limited. These financial statements have not been audited or independently reviewed.
CONDENSED CONSOLIDATED BALANCE SHEETS (Rand)
At At At
30 September 30 June 30 September
2013 2013 2012
(Unaudited) (Audited) (Unaudited)
Figures in million (Restated)* (Restated)*
ASSETS
Non-current assets
Property, plant and equipment 32 195 32 732 33 220
Intangible assets 2 191 2 191 2 194
Restricted cash 38 37 36
Restricted investments 2 143 2 054 1 919
Deferred tax assets 93 104 523
Investments in associates 112 109
Investments in financial assets 42 49 98
Inventories 57 57 58
Trade and other receivables 20
Total non-current assets 36 871 37 333 38 068
Current assets
Inventories 1 482 1 417 1 168
Trade and other receivables 1 238 1 162 1 165
Income and mining taxes 103 132 8
Cash and cash equivalents 2 288 2 089 2 266
5 111 4 800 4 607
Assets of disposal groups classified as held for sale 1 658
Total current assets 5 111 4 800 6 265
Total assets 41 982 42 133 44 333
EQUITY AND LIABILITIES
Share capital and reserves
Share capital 28 325 28 325 28 331
Other reserves 2 790 3 442 2 499
Retained earnings 461 448 3 496
Total equity 31 576 32 215 34 326
Non-current liabilities
Deferred tax liabilities 2 998 3 021 3 166
Provision for environmental rehabilitation 1 990 1 997 1 895
Retirement benefit obligation 198 194 181
Other provisions 63 55 87
Borrowings 6 2 868 2 252 1 840
Total non-current liabilities 8 117 7 519 7 169
Current liabilities
Borrowings 6 291 286 306
Income and mining taxes 24 4 110
Trade and other payables 1 974 2 109 1 982
2 289 2 399 2 398
Liabilities of disposal groups classified as held for sale 440
Total current liabilities 2 289 2 399 2 838
Total equity and liabilities 41 982 42 133 44 333
* The comparative periods have been restated following the adoption of IFRIC 20. Refer to note 2 for details.
The accompanying notes are an integral part of these condensed consolidated financial statements.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (Rand)
Quarter ended Year ended
30 September 30 June 30 September 30 June
2013 2013 2012 2013
Figures in million (Unaudited) (Unaudited) (Unaudited) (Audited)
Cash flow from operating activities
Cash generated by operations 238 221 1 337 3 154
Interest and dividends received 26 48 26 138
Interest paid (29) (40) (29) (125)
Income and mining taxes (paid)/refunded (129) 108 (312)
Cash generated by operating activities 235 100 1 442 2 855
Cash flow from investing activities
Cash transferred to disposal group (162)
Proceeds on disposal of investment in subsidiary 1 264
Purchase of investments (14) (86)
Other investing activities (9) (1) (4)
Net additions to property, plant and equipment(1) (618) (938) (893) (3 652)
Cash utilised by investing activities (627) (953) (1 055) (2 478)
Cash flow from financing activities
Borrowings raised 612 330 678
Borrowings repaid (3) (156) (9) (333)
Ordinary shares issued net of expenses 1 1
Option premium on BEE transaction 2 2
Dividends paid (218) (435)
Cash generated/(utilised) by financing activities 609 (153) 103 (87)
Foreign currency translation adjustments (18) (4) 3 26
Net increase/(decrease) in cash and cash equivalents 199 (1 010) 493 316
Cash and cash equivalents beginning of period 2 089 3 099 1 773 1 773
Cash and cash equivalents end of period 2 288 2 089 2 266 2 089
(1) Includes capital expenditure for Wafi-Golpu and other International projects of R0 million in the September 2013 quarter
(June 2013: R133 million)(September 2012: R131 million) and R537 million in the 12 months ended 30 June 2013.
The accompanying notes are an integral part of these condensed consolidated financial statements.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
for the period ended 30 September 2013 (Rand)
1. Accounting policies
Basis of accounting
The condensed consolidated financial statements for the three months ended 30 September 2013 have been prepared in accordance with
IAS 34, Interim Financial Reporting, JSE Listings Requirements, SAICA Financial Reporting Guides as issued by the Accounting Practices
Committee and in the manner required by the Companies Act of South Africa. They should be read in conjunction with the annual financial
statements for the year ended 30 June 2013, which have been prepared in accordance with International Financial Reporting Standards as
issued by the International Accounting Standards Board (IFRS). The accounting policies are consistent with those described in the annual
financial statements, except for the adoption of applicable revised and/or new standards issued by the International Accounting Standards Board.
2. Change in accounting standard
IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine
IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine (IFRIC 20), which became effective on 1 January 2013, clarifies the
requirements for accounting for the costs of stripping activity in the production phase of surface mining when two benefits accrue: (i) usable
ore that can be used to produce inventory, and (ii) improved access to further quantities of material that will be mined in future periods.
Harmony has applied IFRIC 20 on a retrospective basis in compliance with the transitional requirements of IFRIC 20 for the earliest prior period
presented, which for the year ended 30 June 2013 is 30 June 2012.
Harmony previously accounted for stripping costs incurred during the production phase to remove waste material by deferring these costs,
which were then charged to production costs on the basis of the average life-of-mine stripping ratio.
A stripping activity asset shall be recognised if all of the following are met:
(i) it is probable that the future economic benefit (improved access to the orebody) associated with the stripping activity will flow to the entity;
(ii) the entity can identify the component of the ore body for which access has been improved; and
(iii)the cost relating to the stripping activity associated with that component can be measured reliably.
The stripping asset shall be depreciated over the expected useful life of the identified component of the ore body based on the units of
production method.
If there is no identifiable component of the orebody to which the predecessor asset relates, the asset is written off to retained earnings at the
beginning of the earliest period presented.
The comparative periods presented have been restated. The restatement had no effect on the condensed consolidated cash flow statements.
The results for the year ended 30 June 2013 and the financial position at that date have been audited, but the restatement of the results and
balances affected by IFRIC 20 have not been audited.
Reconciliation of the effect of the change in accounting standard:
Condensed consolidated income statements
Quarter ended Year ended
30 June 30 September 30 June
2013 2012 2013
Figures in million (Unaudited) (Unaudited) (Unaudited)
Cost of sales
Production costs
As previously reported (2 844) (2 870) (11 400)
IFRIC 20 adjustment 32 (8) 79
Restated (2 812) (2 878) (11 321)
Amortisation and depreciation
As previously reported (501) (481) (1 942)
IFRIC 20 adjustment (30) (13) (59)
Restated (531) (494) (2 001)
Increase/decrease in net profit or loss for the period* 2 (21) 20
* There is no taxation effect on these items.
Condensed consolidated statements of comprehensive income
Quarter ended Year ended
30 June 30 September 30 June
2013 2012 2013
Figures in million (Unaudited) (Unaudited) (Unaudited)
Increase/decrease in net profit or loss for the period* 2 (21) 20
Other comprehensive income or loss for the period, net of income tax
Foreign exchange translation
As previously reported 26 26 749
IFRIC 20 adjustment (1) (7)
Restated 26 25 742
Increase/decrease in total comprehensive income or loss for the period 2 (22) 13
* There is no taxation effect on these items.
Condensed consolidated balance sheets
At At
30 June 30 September
2013 2012
Figures in million (Unaudited) (Unaudited)
Non-current assets
Property, plant and equipment
As previously reported 32 820 33 334
IFRIC 20 adjustment (88) (114)
Restated 32 732 33 220
Current assets
Inventories
As previously reported 1 425 1 185
IFRIC 20 adjustment (8) (17)
Restated 1 417 1 168
Share capital and reserves
Other reserves
As previously reported 3 464 2 515
IFRIC 20 adjustment(1) (22) (16)
Restated 3 442 2 499
Retained earnings
As previously report 522 3 611
IFRIC 20 adjustment (74) (115)
Restated 448 3 496
Decrease in total equity (96) (131)
(1) Translation effect of the IFRIC 20 adjustments on foreign operations (Hidden Valley).
Earnings/(loss) and headline earnings/(loss) per share
Quarter ended Year ended
30 June 30 September 30 June
2013 2012 2013
(Unaudited) (Unaudited) (Unaudited)
Total basic and diluted (loss)/earnings per share (cents)
As previously reported (809) 121 (548)
IFRIC 20 adjustment 1 (5) 5
Restated (808) 116 (543)
Total headline (loss)/earnings
Figures in million
As previously reported (804) 529 204
IFRIC 20 adjustment 2 (21) 20
Restated (802) 508 224
Quarter ended Year ended
30 June 30 September 30 June
2013 2012 2013
(Unaudited) (Unaudited) (Unaudited)
Total headline and diluted headline (loss)/earnings per share (cents)
As previously reported (186) 123 47
IFRIC 20 adjustment 1 (5) 5
Restated (185) 118 52
3. Cost of sales
Quarter ended Year ended
30 September 30 June 30 September 30 June
2013 2013 2012 2013
(Unaudited) (Unaudited) (Unaudited) (Audited)
Figures in million (Restated)* (Restated)* (Restated)*
Production costs excluding royalty 2 943 2 767 2 822 11 104
Royalty expense 38 45 56 217
Amortisation and depreciation 577 531 494 2 001
Impairment of assets(1) 2 733 2 733
Rehabilitation expenditure/(credit)(2) 15 (40) 7 (24)
Care and maintenance cost of restructured shafts 17 16 20 68
Employment termination and restructuring costs(3) 94 39 7 46
Share-based payments(4) 51 45 105 266
Other 35 37
Total cost of sales 3 735 6 171 3 511 16 448
* The comparative financials have been restated following the adoption of IFRIC 20. Refer to note 2 for details.
(1) The impairment in the June 2013 quarter consists of an impairment of R2.68 billion on Hidden Valley, R31 million on St Helena and R27 million on Steyn 2.
(2) The credit in the June 2013 quarter relates to a change in estimate following the annual re-assessment.
(3) Included in the September and June 2013 quarters are amounts relating to the restructuring at Hidden Valley and Wafi-Golpu and the introduction of voluntary retrenchment
packages offered in South Africa.
(4) This includes the cost relating to the Employee Share Ownership Plan (ESOP) awards that were granted in August 2012.
4. Deferred taxation
The net deferred taxation debit in the income statement in the June 2013 quarter is primarily due to the derecognition of the deferred tax asset
amounting to R547 million previously recorded for the Hidden Valley operation.
5. Earnings/(loss) and net asset value per share
Quarter ended Year ended
30 September 30 June 30 September 30 June
2013 2013 2012 2013
(Unaudited) (Unaudited) (Unaudited) (Audited)
(Restated)* (Restated)* (Restated)*
Weighted average number of shares (million) 432.6 432.6 431.5 431.9
Weighted average number of diluted shares (million) 433.0 433.1 432.3 432.7
Total earnings/(loss) per share (cents):
Basic earnings/(loss) 3 (808) 116 (543)
Diluted earnings/(loss) 3 (808) 116 (543)
Headline earnings/(loss) 5 (185) 118 52
from continuing operations 5 (185) 97 3
from discontinued operations 21 49
Diluted headline earnings/(loss) 5 (185) 118 52
from continuing operations 5 (185) 97 3
from discontinued operations 21 49
Quarter ended Year ended
30 September 30 June 30 September 30 June
2013 2013 2012 2013
(Unaudited) (Unaudited) (Unaudited) (Audited)
(Restated)* (Restated)* (Restated)*
Figures in million
Reconciliation of headline earnings/(loss):
Continuing operations
Net profit/(loss) 13 (3 497) 412 (2 663)
Adjusted for:
Impairment of investments(1) 7 48 88
Impairment of assets 2 733 2 733
Taxation effect on impairment of assets (38) (38)
Profit on sale of property, plant and equipment (55) (139)
Taxation effect of profit on sale of property,
plant and equipment 14 31
Headline earnings/(loss) 20 (802) 419 12
Discontinued operations
Net profit 89 314
Adjusted for:
Profit on sale of investment in subsidiary(1) (102)
Headline earnings 89 212
Total headline earnings/(loss) 20 (802) 508 224
(1) There is no taxation effect on these items.
Net asset value per share
At At At
30 September 30 June 30 September
2013 2013 2012
(Unaudited) (Audited) (Unaudited)
(Restated)* (Restated)*
Number of shares in issue 435 289 890 435 289 890 435 064 236
Net asset value per share (cents) 7 254 7 405 7 904
* The comparative periods have been restated following the adoption of IFRIC 20. Refer to note 2 for details.
6. Borrowings
The Nedbank revolving credit facility was repaid in full during the December 2011 quarter and the full R850 million facility is available until
December 2013. The balance on Nedbank term facilities at 30 September 2013 is R458 million.
Two draw downs of US$30 million each were made from the US$300 million syndicated revolving credit facility during the September 2013
quarter. This takes the drawn level to US$270 million. The facility is repayable by September 2015.
7. Commitments and contingencies
At At At
30 September 30 June 30 September
2013 2013 2012
Figures in million (Unaudited) (Audited) (Unaudited)
Capital expenditure commitments:
Contracts for capital expenditure 351 416 510
Authorised by the directors but not contracted for 1 835 1 545 2 263
2 186 1 961 2 773
This expenditure will be financed from existing resources and, where appropriate, borrowings.
Contingent liability
For a detailed disclosure on contingent liabilities refer to Harmony's annual report for the financial year ended 30 June 2013, available on the
group's website (www.harmony.co.za). There were no significant changes in contingencies since 30 June 2013.
8. Related parties
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of
the group, directly or indirectly, including any director (whether executive or otherwise) of the group. During the September 2013 quarter,
Frank Abbott purchased 65 600 shares.
9. Subsequent events
There were no subsequent events to report.
10. Segment report
The segment report follows on page 19.
11. Reconciliation of segment information to consolidated income statements and balance sheets
30 September 30 September
2013 2012
(Unaudited) (Unaudited)
Figures in million (Restated)*
The 'Reconciliation of segment information to consolidated financial statements' line item in the
segment report is broken down in the following elements, to give a better understanding of
the differences between the income statement, balance sheet and segment report:
Reconciliation of production profit to gross profit
Total segment revenue 4 018 4 619
Total segment production costs (2 981) (3 078)
Production profit per segment report 1 037 1 541
Discontinued operations (141)
Production profit from continuing operations 1 037 1 400
Cost of sales items, other than production costs and royalty expense (754) (633)
Gross profit as per income statements(1) 283 767
(1) The reconciliation was done up to the first recognisable line item on the income statement. The reconciliation will follow the income statement after that.
30 September 30 September
2013 2012
(Unaudited) (Unaudited)
Figures in million (Restated)*
Reconciliation of total segment mining assets to consolidated property,
plant and equipment
Property, plant and equipment not allocated to a segment
Mining assets 1 155 720
Undeveloped property 5 139 5 139
Other non-mining assets 74 159
Wafi-Golpu assets 981 674
Less: Non-current assets previously classified as held-for-sale (1 178)
7 349 5 514
* The comparative periods have been restated following the adoption of IFRIC 20. Refer to note 2 for details.
Segment report (Rand/Metric) (Unaudited)
for the three months ended 30 September 2013
Production Capital Kilograms
Revenue Production cost* profit* Mining assets* expenditure produced Tonnes milled
30 September 30 September 30 September 30 September 30 September 30 September 30 September
2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012
R million R million R million R million R million kg t'000
Continuing operations
South Africa
Underground
Kusasalethu 471 684 395 434 76 250 3 457 3 326 120 116 1 272 1 601 329 328
Doornkop 342 374 288 249 54 125 3 375 3 283 60 78 765 871 236 245
Phakisa 318 298 265 251 53 47 4 534 4 390 91 78 755 679 156 142
Tshepong 443 509 346 383 97 126 3 918 3 837 68 75 1 049 1 159 249 313
Masimong 319 436 258 258 61 178 1 005 993 38 36 758 987 189 261
Target 1 423 443 225 224 198 219 2 704 2 667 62 87 1 081 1 071 191 178
Bambanani 325 194 169 148 156 46 886 959 33 32 769 438 63 43
Joel 297 375 179 162 118 213 329 247 42 38 697 900 159 167
Unisel 201 190 150 146 51 44 344 674 17 16 476 430 108 116
Target 3 154 151 127 124 27 27 482 367 35 28 392 367 82 87
Surface
All other surface operations 366 337 267 254 99 83 465 197 8 93 846 821 2 781 2 390
Total South Africa 3 659 3 991 2 669 2 633 990 1 358 21 499 20 940 574 677 8 860 9 324 4 543 4 270
International
Hidden Valley 359 287 312 245 47 42 3 347 5 588 48 87 775 689 503 491
Total international 359 287 312 245 47 42 3 347 5 588 48 87 775 689 503 491
Total continuing
operations 4 018 4 278 2 981 2 878 1 037 1 400 24 846 26 528 622 764 9 635 10 013 5 046 4 761
Discontinued operations
Evander 341 200 141 1 178 53 817 159
Total discontinued
operations 341 200 141 1 178 53 817 159
Total operations 4 018 4 619 2 981 3 078 1 037 1 541 24 846 27 706 622 817 9 635 10 830 5 046 4 920
Reconciliation of the segment
information to the
consolidated financial
statements (refer to note 11) (341) (200) 7 349 5 514
4 018 4 278 2 981 2 878 32 195 33 220
* The comparative periods have been restated following the adoption of IFRIC 20. Refer to note 2 for details.
# Capital expenditure for international operations excludes expenditure spent on Wafi-Golpu of R0 million (2013: R131 million).
DEVELOPMENT RESULTS (Metric)
Quarter ending September 2013
Channel
Reef Sampled Width Value Gold
(meters) (meters) (Cm's) (g/t) (Cmg/t)
Tshepong
Basal 391 360 8.92 176.34 1 573
B Reef 260 252 68.34 12.33 843
All Reefs 651 612 33.36 38.14 1 272
Phakisa
Basal 281 292 99.91 11.07 1 106
Leader 3 6 47.00 1.43 67
All Reefs 283 298 98.84 10.98 1 085
Bambanani
Basal 19 19 86.80 11.82 1 026
All Reefs 19 19 86.80 11.82 1 026
Doornkop
South Reef 361 358 45.63 15.56 710
All Reefs 361 358 45.63 15.56 710
Kusasalethu
Vcr Reef 483 407 101.12 13.40 1 355
All Reefs 483 407 101.12 13.40 1 355
Target 1
Elsburg 131 71 258.80 6.45 1 668
All Reefs 131 71 258.80 6.45 1 668
Target 3
Elsburg 17 13 131.32 6.46 849
Basal 49 19 13.05 123.06 1 606
A Reef 62 28 124.04 12.96 1 608
B Reef 222 119 85.24 24.70 2 105
All Reefs 350 178 86.76 21.75 1 887
Masimong 5
Basal 403 360 47.26 17.05 806
B Reef 99 124 85.59 11.84 1 013
All Reefs 503 483 57.08 15.05 859
Unisel
Basal 375.7 277 189.61 9.07 1 721
Leader 469.4 388 207.36 5.75 1 193
Middle 37.2 29 215.39 9.34 2 012
All Reefs 882 693 200.60 7.17 1 437
Joel
Beatrix 254 247 188.99 9.67 1 828
All Reefs 254 247 188.99 9.67 1 828
Total Harmony
Basal 1 519 1 326 78.25 16.43 1 286
Beatrix 254 247 188.99 9.67 1 828
Leader 472 394 204.92 5.74 1 175
B Reef 582 494 76.73 15.50 1 189
A Reef 61.8 27.5 124.04 12.96 1 608
Middle 37.2 28.5 215.39 9.34 2 012
Elsburg 148.0 83.5 239.72 6.45 1 545
Kimberley 79.1 80.25 14.00 102.74 1 438
South Reef 361 357.75 45.63 15.56 710
Vcr 483 407 101.12 13.40 1 355
All Reefs 3 997 3 445 103.66 12.20 1 265
DEVELOPMENT RESULTS (Imperial)
Quarter ending September 2013
Channel
Reef Sampled Width Value Gold
(feet) (feet) (inch) (oz/t) (In.oz/t)
Tshepong
Basal 1 284 1 181 4 4.52 18
B Reef 853 825 27 0.36 10
All Reefs 2 137 2 006 13 1.12 15
Phakisa
Basal 920 958 39 0.33 13
Leader 8 20 19 0.04 1
All Reefs 929 978 39 0.32 12
Bambanani
Basal 62 62 34 0.35 12
All Reefs 62 62 34 0.35 12
Doornkop
South Reef 1 183 1 174 18 0.45 8
All Reefs 1 183 1 174 18 0.45 8
Kusasalethu
Vcr Reef 1 586 1 335 40 0.39 16
All Reefs 1 586 1 335 40 0.39 16
Target 1
Elsburg 430 233 102 0.19 19
All Reefs 430 233 102 0.19 19
Target 3
Elsburg 55 41 52 0.19 10
Basal 160 62 5 3.69 18
A Reef 203 90 49 0.38 18
B Reef 729 390 34 0.71 24
All Reefs 1 147 584 34 0.64 22
Masimong 5
Basal 1 323 1 179 19 0.49 9
B Reef 326 406 34 0.34 12
All Reefs 1 649 1 585 22 0.45 10
Unisel
Basal 1 232 909 75 0.26 20
Leader 1 540 1 271 82 0.17 14
Middle 122 94 85 0.27 23
All Reefs 2 895 2 274 79 0.21 17
Joel
Beatrix 835 810 74 0.28 21
All Reefs 835 810 74 0.28 21
Total Harmony
Basal 4 983 4 352 31.00 0.48 14.76
Beatrix 835 810 74.00 0.28 20.99
Leader 1 548 1 291 81.00 0.17 13.50
B Reef 1 908 1 622 30.00 0.46 13.66
A Reef 203 90 49.00 0.38 18.46
Middle 122 94 85.00 0.27 23.10
Elsburg 485 274 94.00 0.19 17.75
Kimberley 260 263 6.00 2.75 16.52
South Reef 1 183 1 174 18.00 0.45 8.15
Vcr 1 586 1 335 40.00 0.39 15.56
All Reefs 13 113 11 304 41.00 0.35 15
Date: 08/11/2013 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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