Wrap Text
Results for the third quarter FY14 and nine months ended 31 March 2014
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
Q3 FY14
Results for the third quarter FY14 and
nine months ended 31 March 2014
KEY FEATURES
Quarter on quarter
- 5% increase in underground recovered grade to 5.10g/t
- 3 consecutive quarters of grade increases, representing a cumulative increase of 17%
- 3% increase in gold production in the first 9 months of FY14
- 6% decrease in production profit during the March 2014 quarter, due to a 12% decrease in gold produced
- Turned prior quarter’s loss into a profit
- net profit of R31 million (US$3 million);
- headline earnings per share of 12 SA cents (1 US cent)
- Net debt 13% lower and cash balance of R2 billion
RESULTS FOR THE THIRD QUARTER FY14 ENDED 31 MARCH 2014
9 months 9 months
Quarter Quarter Q-on-Q ended ended
March December variance March March %
2014 2013 % 2014 2013* Variance
– kg 8 368 9 515 (12) 27 518 26 786 3
Gold produced
– oz 269 035 305 913 (12) 884 721 861 188 3
– R/kg 343 527 308 665 (11) 324 731 317 772 (2)
Cash operating costs
– US$/oz 987 949 (4) 981 1 148 15
– kg 8 502 9 798 (13) 27 653 26 824 3
Gold sold – oz 273 344 315 014 (13) 889 061 862 379 3
Underground grade – g/t 5.10 4.85 5 4.81 4.60 5
All-in sustaining – R/kg 426 221 397 503 (7) 408 768 417 813 2
costs – US$/oz 1 224 1 222 – 1 234 1 509 18
– R/kg 450 528 415 532 8 431 038 462 982 (7)
Gold price received – US$/oz 1 294 1 277 1 1 302 1 672 (22)
Production profit* – R million 924 986 (6) 2 946 3 910 (25)
– US$ million 86 97 (13) 287 454 (37)
Basic earnings/(loss) – SAc/s 7 (21) >100 (11) 266 >(100)
per share*(1) – USc/s 1 (2) >100 (1) 30 >(100)
Headline earnings/ – Rm 52 (91) >100 (19) 1 026 >(100)
(loss)*(1) – US$m 5 (9) >100 (2) 119 >(100)
Headline earnings/ – SAc/s 12 (21) >100 (4) 238 >(100)
(loss) per share*(1) – USc/s 1 (2) >100 – 28 (100)
Exchange rate – R/US$ 10.83 10.12 7 10.30 8.61 20
* 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
(1) The nine months ended March 2013 include discontinued operations
Shareholder information
Issued ordinary share capital
at 31 March 2014 435 693 819
Issued ordinary share capital
at 31 December 2013 435 693 819
Market capitalisation
At 31 March 2014 (ZARm) 14 247
At 31 March 2014 (US$m) 1 355
At 31 December 2013 (ZARm) 11 284
At 31 December 2013 (US$m) 1 077
Harmony ordinary share and ADR* prices
12-month high (1 April 2013 –
31 March 2014) for ordinary shares R58.58
12-month low (1 April 2013 –
31 March 2014) for ordinary shares R24.48
12-month high (1 April 2013 –
31 March 2014) for ADRs US$6.38
12-month low (1 April 2013 –
31 March 2014) for ADRs US$2.36
Free float 100%
ADR* ratio 1:1
JSE Limited HAR
Range for quarter (1 January –
31 March 2014 closing prices) R27.25 - R40.32
Average daily volume for the quarter
(1 January – 31 March 2014) 1 031 429 shares
Range for quarter (1 October –
31 December 2013 closing prices) R24.48 - R36.14
Average daily volume for the quarter
(1 October – 31 December 2013) 1 180 825 shares
New York Stock Exchange including
other US trading platforms HMY
Range for quarter (1 January –
31 March 2014 closing prices) US$2.52 - US$3.77
Average daily volume for the quarter
(1 January – 31 March 2014) 3 102 376
Range for quarter (1 October –
31 December 2013 closing prices) US$2.36 - US$3.67
Average daily volume for the quarter
(1 October – 31 December 2013) 2 722 889
Investors' calendar
Q4 FY14 and year-end live presentation
in Johannesburg 14 August 2014
Release of Harmony's Integrated
Annual Report of FY14 23 October 2014
Q1 FY15 presentation
(webcast and conference calls only) 5 November 2014
Annual General Meeting 21 November 2014
Q2 FY15 live presentation in Cape Town 9 February 2015
*ADR: American Depository Receipts
CONTACT DETAILS
Corporate Office South African Share Transfer Secretaries
Randfontein Office Park Link Market Services South Africa (Proprietary) Limited
PO Box 2, Randfontein, 1760, South Africa (Registration number 2000/007239/07)
Corner Main Reef Road/Ward Avenue 13th Floor, Rennie House
Randfontein, 1759, South Africa 19 Ameshoff Street
Telephone: +27 (0)11 411 2000
Braamfontein, 2001
Website: www.harmony.co.za
PO Box 4844, Johannesburg, 2000, South Africa
Directors Telephone: +27 (0)86 154 6572
P T Motsepe* Chairman Fax: +27 (0)86 674 4381
M Motloba*^ Deputy Chairman ADR Depositary
G P Briggs Chief Executive Officer
Deutsche Bank Trust Company Americas
F Abbott Financial Director
c/o American Stock Transfer and Trust Company
H E Mashego Executive Director
Peck Slip Station
F F T De Buck*^ Lead independent director
PO Box 2050, New York, NY 10272-2050
J A Chissano*(1)^, K V Dicks*^, Dr D S Lushaba*^,
Email queries: db@amstock.com
C Markus*^, M Msimang*^, K T Nondumo*^,
Toll free: +1-800-937-5449
V P Pillay *^, J Wetton*^, A J Wilkens*
Intl: +1-718-921-8137
* Non-executive Fax: +1-718-921-8334
^ Independent
(1) Mozambican Sponsor
Investor relations team J.P. Morgan Equities South Africa (Pty) Ltd
1 Fricker Road, corner Hurlingham Road
Email: HarmonyIR@harmony.co.za
Illovo
Henrika Ninham Johannesburg, 2196
Investor Relations Manager
Private Bag X9936, Sandton, 2146, South Africa
Tel: +27 (0)11 411 2314
Telephone: +27 (0)11 507 0300
Mobile: +27 (0)82 759 1775
Fax: +27 (0)11 507 0503
Email: henrika@harmony.co.za
Trading Symbols
Marian van der Walt
Executive: Corporate and Investor Relations JSE Limited: HAR
Tel: +27 (0)11 411 2037 New York Stock Exchange, Inc: HMY
Mobile: +27 (0)82 888 1242 Euronext, Brussels: HMY
Berlin Stock Exchange: HAM1
Email: marian@harmony.co.za
Registration number
Company Secretary
1950/038232/06
Riana Bisschoff
Incorporated in the Republic of South Africa
Telephone: +27 (0)11 411 6020
ISIN
Mobile: +27 (0)83 629 4706
E-mail: riana.bisschoff@harmony.co.za ZAE000015228
Harmony's Integrated Annual Report,
the Sustainable Development Information which serves
as supplemental information to the Integrated Annual Report
and its annual report filed on a Form 20F with the
United States' Securities and Exchange Commission for
the financial year ended 30 June 2013 are available on our
website at www.harmony.co.za/investors
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.
Competent person's declaration
Harmony reports in terms of the South African Code for the Reporting
of Exploration results, Mineral Resources and Ore Reserves (SAMREC).
Harmony employs an ore reserve manager at each of its operations who
takes responsibility for reporting mineral resources and mineral reserves
at his operation.
The mineral resources and mineral reserves in this report are
based on information compiled by the following competent
persons:
Resources and Reserves South Africa: Jaco Boshoff, Pr. Sci. Nat.,
who has 18 years' relevant experience and is registered with the
South African Council for Natural Scientific Professions (SACNASP).
Resources and Reserves Papua New Guinea: Gregory Job, BSc, MSc,
who has 25 years relevant experience and is a member of the Australian
Institute of Mining and Metallurgy (AusIMM).
Mr Boshoff and Mr Job are full-time employees of Harmony Gold Mining
Company Limited. These competent persons consent to the inclusion
in the report of the matters based on the information in the form and
context in which it appears.
Mineral Resource and Reserve information as at 30 June 2013 have not
changed.
Message from the chief executive officer
1. SAFETY
Safe mining remains at the core of our values. The unprecedented and
tragic safety accidents of the quarter under review have led to various
actions and initiatives to reinforce our safety practices and behaviour –
one being an external review of Harmony's safety and health strategy,
which is scheduled to be completed during May 2014.
During the quarter we reported on the various safety accidents
extensively (see http://www.harmony.co.za/investors/news-and-events/
company-announcements-2/announcements-2014). More information
on how we approach safety at Harmony can be found in our safety
fact sheet at: http://www.harmony.co.za/investors/news-and-events/
fact-sheets.
2. OPERATIONAL RESULTS
Gold production for the March 2014 quarter decreased by 12% to
8 368kg, from 9 515kg in the December 2013 quarter. Production
stoppages at Doornkop due to the accident in February 2014, flooding
of the shaft bottom at Joel and a slower turnaround and technical issues
at Kusasalethu were the main contributors to lower production quarter
on quarter.
Production at Steyn 2 was suspended six months earlier than the
planned life of mine, due to increased seismicity in the working areas.
Harmony's underground recovered grade increased for a third
consecutive quarter. Quarter on quarter, underground recovered grade
was 5% higher at 5.10g/t (4.85g/t in the December 2013 quarter). The
underground operations recorded a production profit of
R765 million.
The following operations showed an increase in production:
- Tshepong (+62kg), mainly as a result of a 6% increase in tonnes
milled;
- Phakisa (+46kg), due to a 6% increase in the recovered grade to
5.45g/t for the March 2014 quarter;
- Hidden Valley (+44kg) increased recovered grade by 14% to 1.75g/t
for the March 2014 quarter. The increase in grade was partially
offset by an 8% decrease in tonnes milled quarter on quarter; and
- Bambanani and Target 3 also increased production.
Gold production decreased at the following operations, when compared
to the December 2013 quarter:
- Doornkop (–438kg) production was affected by the accident in
February 2014. Rehabilitation work is currently taking place on
192 level with the aim of re-establishing the working area for
production;
- Joel (–329kg) production was hampered by flooding of the shaft
bottom, resulting in 61 000 tonnes less milled than in the previous
quarter;
- Kusasalethu (–211kg) experienced production losses due to safety
stoppages and water availability during the quarter and milled
25% less tonnes than in the December 2013 quarter. The decrease
in tonnes was, however, partially offset by a 9% increase in the
recovered grade to 4.11g/t;
- Dumps (–71kg) milled 135 000 tonnes less than in the December
2013 quarter and the recovered grade decreased to 0.25g/t,
compared to 0.30g/t in the previous quarter;
- Target 1 (–68kg) milled 12 000 tonnes less than in the December
2013 quarter;
- Kalgold (–60kg) was affected by a lower than expected grade
and excessive rain delaying blasting in higher grade blocks; and
- Masimong and Steyn 2 also had lower gold production.
Lower gold production resulted in a 6% decrease in the company's
production profit for the March 2014 quarter (from R986 million in the
December 2013 quarter to R924 million in the March 2014 quarter).
The rand gold price received increased by 8% to R450 528/kg in the
March 2014 quarter, compared to R415 532/kg in the December
2013 quarter. The rand weakened by 7% against the US dollar to
R10.83/US$, from R10.12/US$ in the December 2013 quarter. There
was a slight increase in the dollar gold price received quarter on quarter
(from US$1 277/oz in the previous quarter to US$1 294/oz in the March
2014 quarter).
Cash operating costs decreased by 2% (to R2.87 billion) in the March
2014 quarter. The decrease is mainly attributed to a decrease in
consumables for the South African operations. Capital expenditure for
the March 2014 quarter decreased by 10% to R579 million, compared
to R640 million in the December 2013 quarter.
Lower gold production resulted in a 7% increase in all-in sustaining unit costs
to R426 221/kg.
3. FINANCIAL RESULTS
Gross profit
The 13% decrease in the gold sold was partially offset by the higher
average gold price received, resulting in revenue decreasing by only 6%,
while production costs were lower mainly due to inventory movements
and cost savings. As a result gross profit was at a similar level compared
to the previous quarter.
Net profit/(loss)
The net profit for the March 2014 quarter was R31 million, compared
to a net loss of R91 million in the December 2013 quarter, mainly
due to a smaller foreign exchange translation loss recorded on the
US$-denominated loan. The profit in the current quarter was achieved
after expensing R29 million on the impairment of Steyn 2 and R90 million
on employment retrenchment and restructuring costs.
Impairment of assets
An impairment of R29 million was recorded on Steyn 2 following the
decision to cease mining at the operation.
Other expenses (net)
Included in other expenses (net) in the March 2014 quarter is a loss
of R29 million (December 2013 quarter R111 million) for the foreign
exchange movement on the US$-denominated syndicated loan,
resulting from the Rand weakening during the quarter.
Borrowings
A repayment of the drawn amount on the R1.3 billion Nedbank
Revolving Credit Facility of R467 million was made at the end of the
March 2014 quarter and is now fully repaid. The only outstanding
debt is the US$270 million drawn under the US$300 million syndicated
revolving credit facility.
Earnings/loss per share
The earnings per share of 7 SA cents in the March 2014 quarter
increased from the loss per share of 21 SA cents in the December 2013
quarter.
Employee Share Option Plan (ESOP) share vesting
The vesting of the second tranche of Scheme Shares and Share
Appreciation Rights awarded to qualifying employees took place
during March 2014. Payments to all eligible employees were made
in April 2014.
4. NEW CHIEF OPERATING OFFICER APPOINTED
Alwyn Pretorius was appointed as Harmony's new Chief Operating
Officer on 3 March 2014. Alwyn joined Harmony during its merger with
ARMgold in 2003. He has been an executive of Harmony since 2007
and holds degrees in both BSc Mining Engineering and BSc Industrial
Engineering. With 20 years of underground deep-level gold mining
experience in different supervisory and management positions,
supported by three regional managers and several general managers,
we are confident that Alwyn will lead the change in operational
improvement in South Africa.
5. GOOD PROGRESS AT WAFI-GOLPU
Study work during the quarter continued to evaluate underground
access options and a substantially lower capital expenditure development
option for Wafi-Golpu. Drilling completed at Golpu during the quarter
is expected to have a positive impact on the grade of the upper mining
block due to an increase in the volume of the higher grade hornblende
porphyry compared with the previous estimate. Drilling has also
confirmed continuity of porphyry and high grade mineralisation in the
lower mining block.
Results from two holes were received during the quarter. WR499 was
a long section hole drilled from north to south that confirmed the
northern boundary of the deposit and demonstrated the continuity
of higher grade porphyry mineralisation through and well below the
existing resource. WR504 was a west to east cross section hole that
confirmed the fault structures controlling the distribution of higher
grade in the deposit. These include:
- WR499* – 1 247m @ 1.0g/t Au and 1.2% Cu from 966m, including
560m @ 1.9g/t Au and 2.1% Cu from 1 252m;
- WR504 – 1 369m @ 1.1g/t Au and 1.7% Cu from 399m, including
428m @ 2.2g/t Au and 2.9% Cu from 1 191m.
*Partial result reported last quarter.
The surface drilling program at Golpu is now complete for the 2014
financial year. Results from the last two holes WR499 and WR504 are
being incorporated into a new planning model for integration into
the ongoing study.
6. IN CONCLUSION
Various structural changes have been effected which will
aid in the pro-active management of unplanned events which have
negatively impacted on our production. In parallel, our revised planning
strategy will shift the focus toward de-bottlenecking and optimisation,
and should also result in an increase in the Company's margins. We
remain committed to increasing our profits and cash flow to enable us
to pay dividends in future.
Graham Briggs
Chief Executive Officer
OPERATIONAL RESULTS (Rand/Metric) (US$/Imperial)
South Africa
Underground production Surface production
Three Total
months Total Total South Hidden Total
ended Kusasalethu Doornkop Phakisa Tshepong Masimong Target(1) Bambanani Joel Unisel Target(3) Steyn(2) Underground Phoenix Dumps Kalgold Surface Africa Valley Harmony
Mar-14 226 102 138 232 164 181 52 88 95 73 9 1 360 1 483 620 356 2 459 3 819 467 4 286
Ore milled – t'000
Dec-13 302 238 137 219 161 193 54 149 107 75 12 1 647 1 482 755 364 2 601 4 248 506 4 754
Mar-14 929 434 752 1 024 660 1 173 707 345 458 360 99 6 941 201 155 255 611 7 552 816 8 368
Gold produced – kg
Dec-13 1 140 872 706 962 684 1 241 697 674 512 350 147 7 985 217 226 315 758 8 743 772 9 515
Mar-14 29 868 13 953 24 177 32 922 21 219 37 713 22 731 11 092 14 725 11 574 3 183 223 157 6 462 4 983 8 198 19 643 242 800 26 235 269 035
Gold produced – oz
Dec-13 36 652 28 035 22 698 30 929 21 991 39 899 22 409 21 670 16 461 11 253 4 726 256 723 6 977 7 266 10 127 24 370 281 093 24 820 305 913
Mar-14 4.11 4.25 5.45 4.41 4.02 6.48 13.60 3.92 4.82 4.93 11.00 5.10 0.14 0.25 0.72 0.25 1.98 1.75 1.95
Yield – g/tonne
Dec-13 3.77 3.66 5.15 4.39 4.25 6.43 12.91 4.52 4.79 4.67 12.25 4.85 0.15 0.30 0.87 0.29 2.06 1.53 2.00
Cash operating Mar-14 463 848 582 786 335 239 325 056 356 248 219 864 198 116 450 803 322 395 382 311 289 313 341 644 279 746 441 426 404 459 372 810 344 166 337 621 343 527
– R/kg
costs Dec-13 389 854 320 533 374 572 352 244 353 671 200 373 199 795 261 521 294 779 383 566 221 871 306 967 279 221 357 916 318 184 318 876 308 000 316 206 308 665
Cash operating Mar-14 1 332 1 674 963 934 1 023 632 569 1 295 926 1 098 831 981 804 1 268 1 162 1 071 989 970 987
– $/oz
costs Dec-13 1 198 985 1 151 1 083 1 087 616 614 804 906 1 179 682 943 858 1 100 978 980 947 972 949
Cash operating Mar-14 1 907 2 480 1 827 1 435 1 434 1 425 2 694 1 767 1 554 1 885 3 182 1 744 38 110 290 93 681 590 671
– R/tonne
costs Dec-13 1 472 1 174 1 930 1 547 1 503 1 288 2 579 1 183 1 411 1 790 2 718 1 488 41 107 275 93 634 482 618
Mar-14 1 118 491 722 983 634 1 035 679 390 440 317 95 6 904 220 158 321 699 7 603 899 8 502
Gold sold – Kg
Dec-13 1 184 888 740 1 009 717 1 384 730 681 537 390 154 8 414 180 224 269 673 9 087 711 9 798
Mar-14 35 944 15 786 23 213 31 604 20 384 33 276 21 830 12 539 14 146 10 192 3 054 221 968 7 073 5 080 10 320 22 473 244 441 28 903 273 344
Gold sold – oz
Dec-13 38 066 28 550 23 792 32 440 23 052 44 497 23 470 21 895 17 265 12 539 4 951 270 517 5 787 7 202 8 649 21 638 292 155 22 859 315 014
Mar-14 500 510 223 445 326 249 444 215 286 428 466 477 306 068 176 285 198 666 142 729 42 531 3 113 603 97 738 71 013 142 303 311 054 3 424 657 405 728 3 830 385
Revenue (R'000)
Dec-13 494 357 364 818 306 991 418 452 297 349 575 876 302 668 283 124 222 669 162 260 63 875 3 492 439 75 268 96 949 113 108 285 325 3 777 764 293 622 4 071 386
Cash operating Mar-14 430 915 252 929 252 100 332 857 235 124 257 900 140 068 155 527 147 657 137 632 28 642 2 371 351 56 229 68 421 103 137 227 787 2 599 138 275 499 2 874 637
(R'000)
costs Dec-13 444 434 279 505 264 448 338 859 241 911 248 663 139 257 176 265 150 927 134 248 32 615 2 451 132 60 591 80 889 100 228 241 708 2 692 840 244 111 2 936 951
Inventory Mar-14 64 740 20 837 (11 605) (15 785) (9 651) (36 805) (10 628) 3 609 (6 375) (19 718) (1 061) (22 442) 5 483 (415) 17 747 22 815 373 30 997 31 370
(R'000)
movement Dec-13 28 010 12 659 16 146 22 591 16 418 51 668 12 367 (6 288) 9 603 28 051 3 043 194 268 (11 068) 143 (13 675) (24 600) 169 668 (20 733) 148 935
Mar-14 495 655 273 766 240 495 317 072 225 473 221 095 129 440 159 136 141 282 117 914 27 581 2 348 909 61 712 68 006 120 884 250 602 2 599 511 306 496 2 906 007
Operating costs (R'000)
Dec-13 472 444 292 164 280 594 361 450 258 329 300 331 151 624 169 977 160 530 162 299 35 658 2 645 400 49 523 81 032 86 553 217 108 2 862 508 223 378 3 085 886
Mar-14 4 855 (50 321) 85 754 127 143 60 955 245 382 176 628 17 149 57 384 24 815 14 950 764 694 36 026 3 007 21 419 60 452 825 146 99 232 924 378
Production profit (R'000)
Dec-13 21 913 72 654 26 397 57 002 39 020 275 545 151 044 113 147 62 139 (39) 28 217 847 039 25 745 15 917 26 555 68 217 915 256 70 244 985 500
Mar-14 449 (4 647) 7 921 11 742 5 629 22 662 16 313 1 584 5 300 2 292 1 381 70 626 3 328 277 1 978 5 583 76 209 9 165 85 374
Production profit ($'000)
Dec-13 2 164 7 178 2 609 5 632 3 856 27 227 14 924 11 180 6 140 (4) 2 788 83 694 2 544 1 572 2 623 6 739 90 433 6 941 97 374
Capital Mar-14 115 731 54 634 74 573 71 374 43 154 88 100 24 585 28 339 20 524 27 095 536 548 645 696 2 877 5 478 9 051 557 696 21 225 578 921
(R'000)
expenditure Dec-13 130 309 63 513 98 511 78 740 40 571 64 190 29 220 37 936 24 652 36 768 641 605 051 931 2 463 12 607 16 001 621 052 19 082 640 134
Mar-14 10 688 5 046 6 887 6 592 3 985 8 136 2 271 2 617 1 895 2 502 50 50 669 64 266 506 836 51 505 1 960 53 465
Capital
($'000)
expenditure Dec-13 12 876 6 276 9 734 7 780 4 009 6 343 2 887 3 748 2 436 3 633 63 59 785 92 243 1 246 1 581 61 366 1 885 63 251
Adjusted Mar-14 447 045 556 494 340 244 329 294 357 868 218 341 196 480 414 909 328 059 378 538 295 225 345 144 280 602 430 417 381 105 360 620 346 691 335 115 345 467
– R/kg
operating costs Dec-13 408 698 346 101 389 497 367 910 371 109 222 422 216 640 258 728 307 717 422 833 240 307 323 996 275 126 361 752 330 343 326 029 324 163 316 287 323 591
Mar-14 1 284 1 599 977 946 1 028 627 564 1 192 942 1 087 848 991 806 1 236 1 095 1 036 996 955 992
Adjusted
– $/oz
operating costs Dec-13 1 256 1 064 1 197 1 131 1 141 684 666 795 946 1 299 739 996 846 1 112 1 015 1 002 996 969 994
All-in sustaining Mar-14 566 448 677 873 454 007 415 208 443 606 315 767 222 756 468 583 391 820 476 358 317 846 434 202 283 766 465 069 411 143 383 242 429 210 400 943 426 221
– R/kg
costs Dec-13 533 624 416 838 503 058 458 501 447 878 278 028 241 303 299 632 373 246 526 404 263 910 400 445 280 299 386 310 393 782 360 943 397 713 394 820 397 503
Mar-14 1 627 1 947 1 304 1 193 1 274 907 640 1 346 1 126 1 368 913 1 247 815 1 336 1 181 1 101 1 233 1 143 1 224
All-in sustaining
– $/oz
costs Dec-13 1 640 1 281 1 546 1 409 1 376 854 742 921 1 147 1 618 811 1 231 861 1 187 1 210 1 109 1 222 1 209 1 222
CONDENSED CONSOLIDATED INCOME STATEMENTS (Rand)
Quarter ended Nine months ended Year ended
31 March 31 December 31 March 31 March 31 March 30 June
2014 2013 2013 2014 2013 2013
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
Figures in million Note (Restated)* (Restated)* (Restated)*
Continuing operations
Revenue 3 830 4 071 3 528 11 919 12 419 15 902
Cost of sales 3 (3 595) (3 817) (3 260) (11 147) (10 277) (16 448)
Production costs (2 906) (3 086) (2 675) (8 973) (8 509) (11 321)
Amortisation and depreciation (475) (565) (468) (1 617) (1 470) (2 001)
Impairment of assets (29) – – (29) – (2 733)
Other items (185) (166) (117) (528) (298) (393)
Gross profit/(loss) 235 254 268 772 2 142 (546)
Corporate, administration and other
expenditure (109) (102) (121) (319) (338) (465)
Social investment expenditure (8) (21) (25) (67) (70) (127)
Exploration expenditure (90) (112) (157) (344) (454) (673)
Profit on sale of property, plant and
equipment – – 15 – 139 139
Other expenses (net) 7 (22) (140) (138) (161) (182) (350)
Operating profit/(loss) 6 (121) (158) (119) 1 237 (2 022)
Profit from associates 10 4 – 17 – –
Impairment of investments – – (39) (7) (88) (88)
Net gain on financial instruments 25 39 15 138 181 173
Investment income 64 50 47 159 118 185
Finance cost (59) (57) (65) (176) (198) (256)
Profit/(loss) before taxation 46 (85) (200) 12 1 250 (2 008)
Taxation (15) (6) (44) (59) (416) (655)
Normal taxation 24 – (124) (25) (349) (271)
Deferred taxation (39) (6) 80 (34) (67) (384)
Net profit/(loss) from continuing
operations 31 (91) (244) (47) 834 (2 663)
Discontinued operations
Profit from discontinued operations – – 143 – 314 314
Net profit/(loss) for the period 31 (91) (101) (47) 1 148 (2 349)
Attributable to:
Owners of the parent 31 (91) (101) (47) 1 148 (2 349)
Earnings/(loss) per ordinary share
(cents) 4
Earnings/(loss) from continuing
operations 7 (21) (57) (11) 193 (616)
Earnings from discontinued
operations – – 33 – 73 73
Total earnings/(loss) 7 (21) (24) (11) 266 (543)
Diluted earnings/(loss) per
ordinary share (cents) 4
Earnings/(loss) from continuing
operations 7 (21) (57) (11) 192 (616)
Earnings from discontinued
operations – – 33 – 73 73
Total diluted earnings/(loss) 7 (21) (24) (11) 265 (543)
* The audited June 2013 annual results, unaudited nine months ended March 2013 and unaudited March 2013 quarter results have been restated due to a change in accounting policy. Refer to
note 2 for details. The restatements to the comparative information have not been audited.
The accompanying notes are an integral part of these condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Rand)
Quarter ended Nine months ended Year ended
31 March 31 December 31 March 31 March 31 March 30 June
2014 2013 2013 2014 2013 2013
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
Figures in million (Restated)* (Restated)* (Restated)*
Net profit/(loss) for the period 31 (91) (101) (47) 1 148 (2 349)
Other comprehensive (loss)/income
for the period, net of income tax (416) 378 506 (733) 726 737
Foreign exchange translation (421) 370 519 (745) 716 742
Movements on investments 5 8 (13) 12 10 (5)
Total comprehensive
(loss)/income for the period (385) 287 405 (780) 1 874 (1 612)
Attributable to:
Owners of the parent (385) 287 405 (780) 1 874 (1 612)
* The audited June 2013 annual results, unaudited nine months ended March 2013 and unaudited March 2013 quarter results have been restated due to a change in accounting policy. Refer to
note 2 for details. The restatements to the comparative information have not been audited.
The accompanying notes are an integral part of these condensed consolidated financial statements.
All items in Other comprehensive income will be reclassified subsequently to profit or loss when specific conditions are met.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Rand)
for the nine months ended 31 March 2014
Other Retained
Figures in million Note Share capital reserves earnings Total
Balance – 30 June 2013 as previously reported 28 325 3 464 522 32 311
Restatement for IFRIC 20 2 – (22) (74) (96)
Restated balance – 30 June 2013 28 325 3 442 448 32 215
Share-based payments – 198 – 198
Net loss for the period – – (47) (47)
Other comprehensive loss for the period – (733) – (733)
Balance – 31 March 2014 28 325 2 907 401 31 633
Balance – 30 June 2012 as previously reported 28 331 2 444 3 307 34 082
Restatement for IFRIC 20 2 – (15) (94) (109)
Restated balance – 30 June 2012 28 331 2 429 3 213 33 973
Share-based payments – 215 – 215
Net profit for the period – – 1 148 1 148
Other comprehensive income for the period – 726 – 726
Dividends paid(1) – – (435) (435)
Balance–31 March 2013 28 331 3 370 3 926 35 627
(1) Dividend of 50 SA cents declared on 13 August 2012 and 50 SA cents on 1 February 2013.
The accompanying notes are an integral part of these condensed consolidated financial statements.
The condensed consolidated financial statements for the nine months ended 31 March 2014 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.
CONDENSED CONSOLIDATED BALANCE SHEETS (Rand)
At At At At
31 March 31 December 30 June 31 March
2014 2013 2013 2013
(Unaudited) (Audited) (Unaudited)
Figures in million Note (Restated)* (Restated)*
ASSETS
Non-current assets
Property, plant and equipment 32 400 32 663 32 732 34 828
Intangible assets 2 194 2 193 2 191 2 190
Restricted cash 40 38 37 38
Restricted investments 2 225 2 180 2 054 2 050
Deferred tax assets 84 91 104 652
Investments in associates 5 125 115 109 –
Investments in financial assets 4 4 49 139
Inventories 57 57 57 57
Trade and other receivables – – – 6
Total non-current assets 37 129 37 341 37 333 39 960
Current assets
Inventories 1 306 1 423 1 417 1 191
Trade and other receivables 900 1 149 1 162 1 482
Income and mining taxes 141 106 132 3
Restricted cash 15 15 – –
Cash and cash equivalents 2 008 2 323 2 089 3 099
4 370 5 016 4 800 5 775
Non-current assets and assets of disposal groups classified
as held for sale 6 51 46 – –
Total current assets 4 421 5 062 4 800 5 775
Total assets 41 550 42 403 42 133 45 735
EQUITY AND LIABILITIES
Share capital and reserves
Share capital 28 325 28 325 28 325 28 331
Other reserves 2 907 3 270 3 442 3 370
Retained earnings 401 370 448 3 926
Total equity 31 633 31 965 32 215 35 627
Non-current liabilities
Deferred tax liabilities 3 029 3 000 3 021 3 244
Provision for environmental rehabilitation 2 020 2 016 1 997 1 961
Retirement benefit obligation 205 201 194 188
Other provisions 67 71 55 48
Borrowings 7 2 843 3 280 2 252 2 238
Total non-current liabilities 8 164 8 568 7 519 7 679
Current liabilities
Borrowings 7 – – 286 287
Income and mining taxes 3 – 4 92
Trade and other payables 1 750 1 870 2 109 2 050
Total current liabilities 1 753 1 870 2 399 2 429
Total equity and liabilities 41 550 42 403 42 133 45 735
* The audited June 2013 annual results and unaudited March 2013 results have been restated due to a change in accounting policy.
Refer to note 2 for details. The restatements to the comparative information have not been audited.
The accompanying notes are an integral part of these condensed consolidated financial statements.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (Rand)
Quarter ended Nine months ended Year ended
31 March 31 December 31 March 31 March 31 March 30 June
2014 2013 2013 2014 2013 2013
Figures in million (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
Cash flow from operating activities
Cash generated by operations 755 700 204 1 693 2 933 3 154
Interest and dividends received 34 32 34 92 90 138
Interest paid (39) (21) (27) (89) (85) (125)
Income and mining taxes paid _ (28) (70) (28) (183) (312)
Cash generated by operating activities 750 683 141 1 668 2 755 2 855
Cash flow from investing activities
Increase in restricted cash (3) – – (3) – –
Restricted cash transferred from
disposal group – – 252 – – –
Proceeds on disposal of investment
in subsidiary – – 1 264 – 1 264 1 264
Purchase of investments – – (33) – (72) (86)
Other investing activities – (1) 3 (10) (3) (4)
Net additions to property,
plant and equipment(1) (599) (624) (835) (1 841) (2 714) (3 652)
Cash (utilised)/generated by investing
activities (602) (625) 651 (1 854) (1 525) (2 478)
Cash flow from financing activities
Borrowings raised – – – 612 678 678
Borrowings repaid (462) (3) (4) (468) (177) (333)
Ordinary shares issued – net of expenses – – – – – 1
Option premium on BEE transaction – – – – – 2
Dividends paid – – (217) – (435) (435)
Cash (utilised)/generated by
financing activities (462) (3) (221) 144 66 (87)
Foreign currency translation
adjustments (1) (20) 17 (39) 30 26
Net (decrease)/increase in cash and cash
equivalents (315) 35 588 (81) 1 326 316
Cash and cash equivalents – beginning
of period 2 323 2 288 2 511 2 089 1 773 1 773
Cash and cash equivalents – end
of period 2 008 2 323 3 099 2 008 3 099 2 089
(1) The 2013 year includes capital expenditure for Wafi-Golpu and other international projects of R537 million, the March 2013 quarter R148 million and the nine months ended 31 March 2013
R403 million.
The accompanying notes are an integral part of these condensed consolidated financial statements.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
for the period ended 31 March 2014 (Rand)
1. Accounting policies
Basis of accounting
The condensed consolidated financial statements for the nine months ended 31 March 2014 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.
The following accounting standards, amendments to standards and new interpretations have been adopted with effect from 1 July 2013.
IFRS 7 Amendment–Disclosures–Offsetting Financial Assets and Financial Liabilities
IFRS 10 Consolidated Financial Statements
IFRS 11 Joint Arrangements
IFRS12 Disclosure of Interests in Other Entities
IFRS 13 Fair Value Measurement
IFRSs Annual Improvements 2009 – 2011
IAS 19 Employee Benefits (Revised 2011)
IAS 27 Separate Financial Statements (Revised 2011)
IAS 28 Investments in Associates and Joint Ventures (Revised 2011)
IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine
New standards and amendments which have an impact on the condensed consolidated financial statements of the group are described below:
IAS 19 includes a number of amendments to the accounting for defined benefit plans, including actuarial gains and losses that are now
recognised in other comprehensive income (OCI). Actuarial gains and losses recognised in OCI will not be recycled to profit or loss. The impact
for the group was immaterial.
IFRS 11 requires joint operations to be accounted at the group's interest in the assets, liabilities, revenue and expenses of the joint operation.
Harmony previously accounted for joint operations using the proportional consolidation method. The change in accounting policy has not had
an impact on any previously reported numbers.
IFRIC 20 clarifies the requirements for accounting for costs of stripping activity in the production phase of surface mining. Stripping assets that
cannot be attributed to an identifiable component of the orebody will be written off to retained earnings on adoption of IFRIC 20. Refer to
note 2 for further details.
2. Change in accounting policies
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 prospective basis from 1 July 2011 in compliance with the transitional requirements of IFRIC 20.
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 orebody for which access has been improved; and
(iii) the cost relating to the stripping activity associated with that component can be measure reliably.
The stripping asset shall be depreciated over the expected useful life of the identified component of the orebody based on the units of
production method.
Where there were no identifiable components of the orebody to which the predecessor asset relates, the asset was written off to retained
earnings at the beginning of the earliest period presented. An amount of R54 million was written off to opening retained earnings.
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 this date have been reviewed and audited respectively, 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 Nine months ended Year ended
31 March 31 March 30 June
2013 2013 2013
(Unaudited) (Unaudited) (Audited)
Cost of sales
Production costs
As previously reported (2 707) (8 556) (11 400)
IFRIC 20 adjustment 32 47 79
Restated (2 675) (8 509) (11 321)
Amortisation and depreciation
As previously reported (459) (1 441) (1 942)
IFRIC 20 adjustment (9) (29) (59)
Restated (468) (1 470) (2 001)
Increase/decrease in net profit/loss for the period* 23 18 20
* There is no material taxation effect on these items.
Condensed consolidated statements of comprehensive income
Quarter ended Nine months ended Year ended
31 March 31 March 30 June
2013 2013 2013
(Unaudited) (Unaudited) (Audited)
Increase/decrease in net profit/loss for the period* 23 18 20
Other comprehensive income for the period net of income tax
Foreign exchange translation
As previously reported 523 723 749
IFRIC 20 adjustment (4) (7) (7)
Restated 519 716 742
Increase/decrease in total comprehensive income/loss for the period 19 11 13
* There is no material taxation effect on these items.
Condensed consolidated balance sheets
At At
30 June 31 March
2013 2013
Figures in million (Audited) (Unaudited)
Non-current assets
Property, plant and equipment
As previously reported 32 820 34 911
IFRIC 20 adjustment (88) (83)
Restated 32 732 34 828
Current assets
Inventories
As previously reported 1 425 1 206
IFRIC 20 adjustment (8) (15)
Restated 1 417 1 191
Share capital and reserves
Other reserves
As previously reported 3 464 3 392
IFRIC 20 adjustment(1) (22) (22)
Restated 3 442 3 370
Retained earnings
As previously reported 522 4 002
IFRIC 20 adjustment (74) (76)
Restated 448 3 926
Decrease in total equity (96) (98)
(1) Translation effect of the IFRIC 20 adjustments on foreign operations (Hidden Valley).
Earnings/(loss) and headline earnings/(loss) per share
Quarter ended Nine months ended Year ended
31 March 31 March 30 June
2013 2013 2013
(Unaudited) (Unaudited) (Audited)
Basic (loss)/earnings per share (cents)
As previously reported (29) 262 (548)
IFRIC 20 adjustment 5 4 5
Restated (24) 266 (543)
Diluted (loss)/earnings per share (cents)
As previously reported (29) 261 (548)
IFRIC 20 adjustment 5 4 5
Restated (24) 265 (543)
Total headline (loss)/earnings
Figures in million
As previously reported (202) 1 008 204
IFRIC 20 adjustment 23 18 20
Restated (179) 1 026 224
Headline (loss)/earnings per share (cents)
As previously reported (47) 234 47
IFRIC 20 adjustment 5 4 5
Restated (42) 238 52
Diluted headline (loss)/earnings (cents)
As previously reported (47) 233 47
IFRIC 20 adjustment 5 4 5
Restated (42) 237 52
3. Cost of sales
Quarter ended Nine months ended Year ended
31 March 31 December 31 March 31 March 31 March 30 June
2014 2013 2013 2014 2013 2013
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
Figures in million (Restated)* (Restated)* (Restated)*
Production costs – excluding royalty 2 881 3 047 2 626 8 871 8 337 11 104
Royalty expense 25 39 49 102 172 217
Amortisation and depreciation 475 565 468 1 617 1 470 2 001
Impairment of assets(1) 29 – – 29 – 2 733
Rehabilitation expenditure/(credit)(2) 17 (15) 10 17 16 (24)
Care and maintenance cost of
restructured shafts 16 18 16 51 52 68
Employment termination and
restructuring cost(3) 90 50 – 234 7 46
Share-based payments(4) 62 113 95 227 221 266
Other – – (4) (1) 2 37
Total cost of sales 3 595 3 817 3 260 11 147 10 277 16 448
* The audited June 2013 annual results, unaudited nine months ended March 2013 and unaudited March 2013 quarter results have been restated due to a change in accounting policy.
Refer to note 2 for details. The restatements to the comparative information have not been audited.
(1) The decision to stop mining at the Steyn 2 shaft (included in the Bambanani segment) resulted in the remaining carrying value being impaired.
(2) A credit of R24 million arose in the December 2013 quarter as a result of work performed in the Free State, resulting in a reduction in the rehabilitation liability.
(3) Included in the December 2013 and March 2014 quarters are amounts relating to the restructuring at Hidden Valley and the 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. Earnings/(loss) and net asset value per share
Quarter ended Nine months ended Year ended
31 March 31 December 31 March 31 March 31 March 30 June
2014 2013 2013 2014 2013 2013
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
(Restated)* (Restated)* (Restated)*
Weighted average number
of shares (million) 433.3 432.9 431.8 433.0 431.6 431.9
Weighted average number of diluted
shares (million) 434.3 433.4 432.8 434.4 432.8 432.7
Total earnings/(loss) per share (cents):
Basic earnings/(loss) 7 (21) (24) (11) 266 (543)
Diluted earnings/(loss) 7 (21) (24) (11) 265 (543)
Headline earnings/(loss) 12 (21) (42) (4) 238 52
– from continuing operations 12 (21) (51) (4) 189 3
– from discontinued operations – – 9 – 49 49
Diluted headline earnings/(loss) 12 (21) (42) (4) 237 52
– from continuing operations 12 (21) (51) (4) 188 3
– from discontinued operations – – 9 – 49 49
Figures in million
Reconciliation of headline
earnings/(loss):
Continuing operations
Net profit/(loss) 31 (91) (244) (47) 834 (2 663)
Adjusted for:
Impairment of investments(1) – – 39 7 88 88
Impairment of assets 29 – – 29 - 2 733
Taxation effect on impairment of assets (8) – – (8) – (38)
Profit on sale of property, plant and
equipment – – (15) – (139) (139)
Taxation effect of profit on sale of
property, plant and equipment – – – – 31 31
Headline earnings/(loss) 52 (91) (220) (19) 814 12
Discontinued operations
Net profit – – 143 – 314 314
Adjusted for:
Profit on sale of investment in subsidiary(1) – – (102) – (102) (102)
Headline earnings – – 41 – 212 212
Total headline earnings/(loss) 52 (91) (179) (19) 1 026 224
(1) There is no taxation effect on these items.
Net asset value per share
At At At At
31 March 31 December 30 June 31 March
2014 2013 2013 2013
(Unaudited) (Audited) (Unaudited)
(Restated)* (Restated)*
Number of shares in issue 435 693 819 435 693 819 435 289 890 435 257 691
Net asset value per share (cents) 7 259 7 337 7 405 8 185
* The audited June 2013 annual results, unaudited nine months ended March 2013 and unaudited March 2013 quarter results have been restated due to a change in accounting policy. Refer
to note 2 for details. The restatements to the comparative information have not been audited.
5. Investment in associate
Investment in associate includes Harmony's 10.38% share of Rand Refinery Proprietary Limited (Rand Refinery) results amounting to R17 million for
the nine months ended 31 March 2014. Rand Refinery has not issued its audited results for its year ended 30 September 2013 and therefore
Harmony's share of results has been based on unaudited management accounts.
Rand Refinery implemented a new Enterprise Resource Planning (ERP) system on 1 April 2013 to conduct its financial and management
accounting. Since the implementation of the ERP software, the customisation of the software has been problematic with the result that Rand
Refinery has not been able to reconcile certain accounts at 30 September 2013. Rand Refinery's management team is currently resolving
the problems encountered with the ERP software and is in the process of investigating the transactions processed from 1 April 2013 on the
ERP system to determine if any adjustments to their current financial records are required. At this stage, the Rand Refinery management team
cannot be certain that the results in its management accounts are accurate.
6. Non-current assets and assets of disposal groups classified as held for sale
During the December 2013 quarter, a cash offer for Witwatersrand Consolidated Gold Resources Limited's (Wits Gold) entire share capital was
made to all Wits Gold shareholders by Sibanye Gold Limited. Harmony has accepted the offer. Following this, the balance which represents
Harmony's fair value stake in Wits Gold has been classified as a non-current asset held for sale (formerly classified as Investment in financial
assets) under IFRS 5. See note 11 for developments after balance sheet date.
7. Borrowings
Two draw downs of US$30 million each were made from the US$300 million syndicated revolving credit facility during the September 2013
quarter. There were no draw downs subsequently and the drawn level remains at US$270 million. The weakening of the Rand against the
US$ resulted in a foreign exchange translation loss of R144 million being recorded for the year to date, increasing the borrowings balance and
other expenses (net). The facility is repayable by September 2015.
Harmony refinanced its Nedbank revolving credit facility and entered into a new agreement for R1.3 billion revolving credit facility during the
December 2013 quarter. At the same time management also agreed an amended set of covenants with the leader group, to give the group
more long-term financial flexibility. The interest rate is equivalent to JIBAR + 350 basis points. The outstanding amount at 28 March 2014 of
R467 million was repaid. The facility is available until December 2016.
8. Financial risk management activities
Fair value determination
The following table presents the group's assets and liabilities that are measured at fair value by level within the fair value hierarchy:
Level 1: Quoted prices (unadjusted) in active markets for identical assets;
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset, either directly or indirectly (that is, as prices)
or indirectly (that is derived from prices);
Level 3: Inputs for the asset that are not based on observable market data, (that is unobservable inputs).
At At At At
31 March 31 December 30 June 31 March
2014 2013 2013 2013
Figures in million (Unaudited) (Audited) (Unaudited)
Available-for-sale financial assets(1)*
Level 1 51 46 44 44
Level 2 – – – –
Level 3 4 4 5 96
Fair value through profit and loss(2)*
Level 1 – – – –
Level 2 768 934 1 041 1 043
Level 3 – – – –
(1) Level 1 fair values are directly derived from actively traded shares on the JSE.
Level 3 fair values have been valued by the directors by performing independent valuations on an annual basis to ensure that significant prolonged decline in the value of the investments
has occurred. At the end of the 2013 financial year, the investment in Rand Refinery was reclassified as an investment in associate on obtaining significant influence.
(2) The majority of the level 2 fair values are directly derived from the Shareholders Weighted Top 40 index (SWIX 40) on the JSE, and are discounted at market interest rate.
* Includes non-current assets or disposal groups held for sale where applicable.
9. Commitments and contingencies
Figures in million At At At At
31 March 31 December 30 June 31 March
2014 2013 2013 2013
(Unaudited) (Audited) (Unaudited)
Capital expenditure commitments:
Contracts for capital expenditure 245 322 416 594
Authorised by the directors but not contracted for 491 1 152 1 545 958
736 1 474 1 961 1 552
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 integrated 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.
10. 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 in the company.
11. Subsequent events
(a) On 14 April 2014 the consideration for the sale of Wits Gold was received.
(b) In April 2014, the Department of Mineral Resources approved the ground swap transaction between Joel mine and Sibanye Gold Limited's
Beatrix mine. However, the execution of the agreements is still pending and therefore the transaction is not effective. The execution is
expected by June 2014.
(c) During April 2014, the payment to employees was made for the second tranche of ESOP shares and SARs, following the vesting in
March 2014.
12. Segment report
The segment report follows below.
13. Reconciliation of segment information to condensed consolidated income statements and balance sheets
Nine months ended
31 March 31 March
2014 2013
(Unaudited) (Unaudited)
Figures in million (Restated)*
The "Reconciliation of segment information to condensed 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 financial statements and segment report:
Reconciliation of production profit to gross profit
Total segment revenue 11 919 13 293
Total segment production costs (8 973) (9 042)
Production profit per segment report 2 946 4 251
Discontinued operations – (341)
Production profit from continuing operations 2 946 3 910
Cost of sales items, other than production costs and royalty expense (2 174) (1 768)
Gross profit as per income statements(1) 772 2 142
(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.
At At
31 March 31 March
2014 2013
(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 821 832
Undeveloped property 5 139 5 139
Other non-mining assets 133 59
Wafi-Golpu assets 971 998
7 064 7 028
* The nine months ended March 2013 results have been restated due to a change in accounting policy. Refer to note 2 for details.
Segment report (Rand/Metric) (Unaudited)
for the nine months ended 31 March 2014
Production
Revenue Production cost* profit/(loss)* Mining assets* Capital expenditure# Kilograms produced Tonnes milled
31 March 31 March 31 March 31 March 31 March 31 March 31 March
2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013
R million R million R million R million R million kg t'000
Continuing operations
South Africa
Underground
Kusasalethu 1 466 1 037 1 363 1 186 103 (149) 3 539 3 354 366 272 3 341 2 052 857 499
Doornkop 930 1 279 854 786 76 493 3 385 3 360 178 222 2 071 2 772 576 766
Phakisa 952 860 786 730 166 130 4 622 4 512 264 242 2 213 1 851 431 379
Tshepong 1 305 1 547 1 024 1 089 281 458 3 914 3 815 218 227 3 035 3 339 700 829
Masimong 903 1 290 742 740 161 550 1 040 1 005 122 124 2 102 2 777 514 658
Target 1 1 466 1 385 747 675 719 710 2 736 2 704 214 262 3 495 3 070 565 538
Bambanani(a) 1 040 626 513 448 527 178 844 930 88 92 2 419 1 348 190 144
Joel 756 1 152 508 487 248 665 379 275 108 116 1 716 2 529 396 460
Unisel 622 647 452 429 170 218 662 663 62 57 1 446 1 386 310 332
Target 3 459 546 407 379 52 167 525 429 99 104 1 102 1 207 230 250
Surface
All other surface operations 961 1 152 735 746 226 406 469 385 33 222 2 215 2 533 7 841 7 365
Total South Africa 10 860 11 521 8 131 7 695 2 729 3 826 22 115 21 432 1 752 1 940 25 155 24 864 12 610 12 220
International
Hidden Valley 1 059 898 842 814 217 84 3 221 6 368 89 368 2 363 1 922 1 476 1 387
Total international 1 059 898 842 814 217 84 3 221 6 368 89 368 2 363 1 922 1 476 1 387
Total continuing
operations 11 919 12 419 8 973 8 509 2 946 3 910 25 336 27 800 1 841 2 308 27 518 26 786 14 086 13 607
Discontinued operations
Evander – 874 – 533 – 341 – – – 140 – 1 955 – 390
Total discontinued
operations – 874 – 533 – 341 – – – 140 – 1 955 – 390
Total operations 11 919 13 293 8 973 9 042 2 946 4 251 25 336 27 800 1 841 2 448 27 518 28 741 14 086 13 997
Reconciliation of the
segment information to the
condensed consolidated
financial statements (refer to
note 13) – (874) – (533) 7 064 7 028
11 919 12 419 8 973 8 509 32 400 34 828
* The March 2013 results have been restated due to a change in accounting policy. Refer to note 2 for details.
# Capital expenditure for international operations excludes expenditure spend on Wafi-Golpu of Rnil (2013: R403 million).
(a) Includes Steyn 2.
DEVELOPMENT RESULTS (Metric) DEVELOPMENT RESULTS (Imperial)
Quarter ending March 2014 Quarter ending March 2014
Channel Channel
Reef Sampled Width Value Gold Reef Sampled Width Value Gold
Meters Meters (Cm's) (g/t) (Cmg/t) (feet) (feet) (inch) (oz/t) (In.oz/t)
Tshepong Tshepong
Basal 331 292 7.91 154.93 1 225 Basal 1 085 958 3.00 4.69 14
B Reef 155 128 106.02 1.72 182 B Reef 508 420 42.00 0.05 2
All Reefs 486 420 37.81 24.00 907 All Reefs 1 593 1 378 15.00 0.69 10
Phakisa Phakisa
Basal 328 332 92.39 11.87 1 097 Basal 1 077 1 089 36.00 0.35 13
All Reefs 328 332 92.39 11.87 1 097 All Reefs 1 077 1 089 36.00 0.35 13
Total Bambanani Total Bambanani
(Incl. Bambanani, Steyn 2) (Incl. Bambanani, Steyn 2)
Basal – – – – – Basal – – – – –
All Reefs – – – – – All Reefs – – – – –
Doornkop Doornkop
South Reef 187 201 46.00 18.17 836 South Reef 614 659 18.00 0.53 10
All Reefs 187 201 46.00 18.18 836 All Reefs 614 659 18.00 0.53 10
Kusasalethu Kusasalethu
VCR Reef 480 292 96.00 8.18 785 VCR Reef 1 576 958 38.00 0.24 9
All Reefs 480 292 96.00 8.18 785 All Reefs 1 576 958 38.00 0.24 9
Total Target Total Target
(incl. Target 1 & Target 3) (incl. Target 1 & Target 3)
Elsburg 336 289 147.33 6.75 994 Elsburg 1 101 948 58.00 0.20 11
Basal 134 74 8.08 127.83 1 033 Basal 441 243 3.00 3.95 12
A Reef 120 50 120.16 7.50 901 A Reef 395 164 47.00 0.22 10
B Reef 169 104 60.62 18.28 1 108 B Reef 554 341 24.00 0.53 13
All Reefs 759 517 107.33 9.44 1 013 All Reefs 2 490 1 696 42.00 0.28 12
Masimong 5 Masimong 5
Basal 481 430 40.73 21.24 865 Basal 1 578 1 411 16.00 0.62 10
B Reef 131 144 68.63 16.19 1 111 B Reef 431 472 27.00 0.47 13
All Reefs 612 574 47.72 19.42 927 All Reefs 2 009 1 883 19.00 0.56 11
Unisel Unisel
Basal 405 340 120.44 15.31 1 844 Basal 1 327 1 115 47.00 0.45 21
Leader 476 344 179.97 4.56 821 Leader 1 562 1 129 71.00 0.13 9
All Reefs 881 684 150.38 8.84 1 329 All Reefs 2 889 2 244 59.00 0.26 15
Joel Joel
Beatrix 118 111 118.00 10.14 1 197 Beatrix 388 364 46.00 0.30 14
All Reefs 118 111 118.00 10.15 1 197 All Reefs 388 364 46.00 0.30 14
Total Harmony Total Harmony
Basal 1 679 1 468 62.70 19.53 1 224 Basal 5 509 4 816 25.00 0.56 14
Beatrix 118 111 118.00 10.15 1 197 Beatrix 388 364 46.00 0.30 14
Leader 476 344 179.97 4.56 821 Leader 1 562 1 129 71.00 0.13 9
B Reef 455 376 79.14 10.03 794 B Reef 1 492 1 234 31.00 0.29 9
A Reef 120 50 120.16 7.50 901 A Reef 395 164 47.00 0.22 10
Elsburg 336 289 147.33 6.75 994 Elsburg 1 101 948 58.00 0.20 11
South Reef 187 201 46.00 18.18 836 South Reef 614 659 18.00 0.53 10
VCR 480 292 96.00 8.18 785 VCR 1 576 958 38.00 0.24 9
All Reefs 3 852 3 131 90.28 11.46 1 035 All Reefs 12 636 10 272 36.00 0.33 12
Date: 06/05/2014 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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