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Harmony Gold Mining Company Limited - Announcement
Release Date: 27/01/2004 08:00:39 Code(s): HARHarmony Gold Mining Company Limited - Announcement
Harmony Gold Mining Company Limited
Registration number: 1950/038232/06
JSE code: HAR ISIN: ZAE000015228
Key indicators
Highlights for the quarter
* solid operational performance with excellent cost control
* CONOPS implemented at Free Gold and Deelkraal. Negotiations underway for
remainder of operations
* good cash earnings allow for an interim dividend of 40 cents per share
* ARMI converts its Harmony equity
* acquisition of 42,2% of Avgold from Avmin. Offer to minorities to follow
* growth projects on schedule and within budget
* Abelle Limited feasibility study on Morobe completed and further good
exploration results from Wafi
Quarterly financial highlights
31 December 30 September
2003 2003
Cash operating profit
Rand 271 million 333 million
US$ 40 million 45 million
Cash earnings
- SA cents per share 105 130
- US cents per share 15 18
Basic earnings
- SA cents per share 92 (24)
- US cents per share 14 (3)
Headline earnings
- SA cents per share (66) (28)
- US cents per share (10) (4)
Fully diluted earnings
SA cents per share 92 (24)
US cents per share 14 (3)
Gold produced
Kg 29 294 30 145
Oz 941 826 969 179
Cash costs
R/Kg 75 888 75 319
$/Oz 350 316
Chief Executive"s review
SAFETY REPORT
We regret to report that during the last quarter 12 of our employees lost their
lives in our operations. The company extends sincere condolences to the
families, friends and relatives of the deceased.
The quarter"s safety performance indicates an improvement with regards to key
safety indicators except for the Fatality Frequency Rate. A number of shafts
achieved good safety milestones.
Date Shaft Fatality free shifts
6 October 2003 Matjhabeng 1 000 000
8 October 2003 Tshepong 500 000
22 November 2003 Harmony 2 1 000 000
A team of internal safety auditors were trained to perform a safety system
audit on all Harmony shafts during the coming quarter. The audit will assist in
focusing our shafts to ensure that there is complete legal compliance.
Are the South African producers missing the Gold Bull Run?
With the US Dollar gold price firmly above the US$400/oz level, the
strengthening of the South African Rand has resulted in South African producers
not yet benefiting from the current bull run.
This has also impacted on the stock price performance of South African gold
producers, who have seen their stock prices underperform relative to their
North American peer group. There could still be an ideal opportunity for all
stakeholders to participate in the benefits of a higher US Dollar gold price
environment if the South African Rand were to weaken to more realistic levels.
This will impact on the local industries" ability to fund its future growth
through the re-investment of net cash flows. The capital cost to develop deep
level mines in South Africa remains high.
Subsequent to quarter end the South African Rand has weakened to levels above
R7,00 to the US Dollar following a correction in the US Dollar.
The South African Rand could stabilise at these levels. If we receive an
average Gold price of R90 000/kg (+6%) for the coming quarter, our cash
operating profits could increase by as much as 52%.
The past quarter in review solid operational performance for second quarter in
a row
Although the South African Rand continued its strong trend against the US
Dollar reaching a high of R6,09 to the US Dollar during December 2003, Harmony
again proved its operational resilience by returning a solid performance for a
second quarter in a row. The South African Rand has during the past quarter
reached levels last seen pre-March 2000, nearly four years ago.
*Following the completion of the merger between Harmony and ARMgold on 22
September 2003, the September quarter results are presented in a pro forma
combined format to allow for a quarter on quarter comparison.
The company reported decreased cash operating profits down by 19% from
R332,9 million to R271,0 million.
The performance of the company is highlighted in the following table:
%
December 2003 September 2003 Variance
Production kg 29 294 30 145 (3)
Production oz 941 820 969 179 (3)
Revenue R/kg 85 139 86 364 (1)
Cash cost R/kg 75 888 75 319 (1)
Revenue US$/oz 393 362 9
Cash cost US$/oz 350 316 (11)
Exchange rate R/US$ 6,75 7,42 (9)
The impact of the strong Rand is evident and despite a 9% increase in the US
Dollar gold price, we received a R/kg gold price which, measured quarter on
quarter, was another 1% lower at R85 139/kg. Cash working costs were well
controlled, decreasing by 2% or R47,4 million. In R/kg terms, cash working
costs increased marginally from R75 319 to R75 888/kg. Underground cash costs
in R/tonne terms increased by 3% from R403/tonne to R414/tonne partly as a
result of the 5% reduction in tonnage treated. In US Dollar terms our cash
operating profit margin decreased slightly from US$46/oz (13%) to US$43/oz
(10%).
Although we have reached an agreement with the labour unions on the
introduction of CONOPS (continuous operations) at our Free Gold and Deelkraal
operations, these benefits are only expected to start contributing to the
operational performance of the company in three to six months" time. Activities
related to the introduction of CONOPS are underway at the various Free Gold
shafts and are progressing well. We are in the process of planning the
introduction of CONOPS at the remaining Harmony operations. The business case
for this approach is compelling and will bring us in line with international
best practice in optimising capital efficiency. Costs have however already been
incurred, increased labour charges and underground development to establish
additional working places, and are reflected in the reported working costs. All
stakeholders stand to benefit significantly from the successful introduction of
CONOPS.
A quarter on quarter cash operating profit variance analysis
Cash operating profit September 2003 R332,9 million
volume decrease (tonnes) (5%) (R124,5 million)
working cost decrease (%) 2% R47,4 million
recovery grade increase (g/t) 2% R50,9 million
Rand gold price reduction (R/kg) (1%) (R35,7 million)
net variance (R61,9 million)
Cash operating profit December 2003 R271,0 million
Quarter ended Quarter ended
Earnings per share December 2003 September 2003
Cash earnings 105 130
Basic earnings 92 (24)
Headline earnings (66) (28)
Fully Diluted earnings 92 (24)
The company continues to generate good cash earnings, returning 105 cents per
share for the December 2003 quarter. This was 19% less than the 130 cents per
share reported previously.
Reconciliation between basic and headline earnings
Quarter ended Quarter ended
Earnings in cents per share December 2003 September 2003
Basic earnings 92 (24)
Less profit on sale of mining assets 1 4
Less profit on disposal of Russian
investments net of tax 173
Add amortisation on ARMgold goodwill 16
(66) (28)
Using a weighted average share capital of 230 324 449 shares, fully diluted
earnings per share for the first half of the financial year totals 76 cents per
share. Due to the company"s consistent ability to generate good cash earnings,
the Harmony Board feels that declaring a 40 cent dividend rewards our
shareholders appropriately.
December quarter results at different gold prices
During the past month the industry has seen extreme volatility in the R/US$
exchange rate.
The R/kg price of gold has varied between R81 000/kg and R97 000/kg. Being
unhedged, the impact of the change in the gold price flows through to the cash
operating profit line immediately. Using the December 2003 quarterly production
and cash cost profiles, the effect of a change in R/kg gold price received,
indicates the significant leverage of Harmony to currency fluctuations.
Gold price Cash operating % Gold price % Profit
(R/kg)profit (R"million) variance variance
85 139 271,0 Actual results for December 2003 quarter
90 000 413,4 6% 52%
95 000 560,0 12% 107%
100 000 706,4 18% 161%
105 000 852,8 24% 215%
ARMI (AFRICAN RAINBOW MINERALS INVESTMENTS) CONVERTS ITS HARMONY
EQUITY
On 7 November 2003, the Boards of Avmin, Harmony and ARMI announced that they
had reached agreement in principle regarding a range of indivisible
transactions. On the implementation thereof, South Africa"s largest Black
controlled mineral resources company under the leadership of the current
Harmony Chairman, Patrice Motsepe, will have been created.
The transactions are best illustrated as follows:
Step 1 - Harmony acquires Avmin"s shareholding (42%) in Avgold (see next
section for detail)
Step 2 - Avmin acquires ARMI"s shareholding (14%) in Harmony and its
effective interest of 41,5% in the Modikwa Platinum Joint Venture
Step 3 - Avmin acquires Kalplats from Harmony for R100 million (2 million
Avmin shares)
Step 4 - Conclusion of a voting pool agreement between Harmony and
ARMI with respect to their shareholding in Avmin. Harmony already
owns 34,5% or 38 789 761 shares in Avmin.
The structure post the transaction:
The parties agreed that Avmin will change its name to African Rainbow Minerals
(ARM) on completion of the transaction.
The rationale for the transaction being:
* to establish ARM as a fully empowered mineral resource company that could
become a partner-of-choice for new South African mining ventures,
* to build a strong financial base for ARM to support new mining investments,
and
* to increase ARM"s stake in Harmony from 14% to above 20%.
The relevance to Harmony is that ARM will, without placing Harmony"s Black
Economic Empowerment credentials at risk, be well positioned to participate in
further growth opportunities that the African mining sector offers. Harmony
could stand to benefit.
The range of transactions are expected to be completed by mid-April 2004.
OUR GROWTH STORY CONTINUES UPGRADING THE QUALITY OF OUR PRODUCTION BASE
Harmony to acquire Avgold
On 13 November 2003 the company announced that it had reached an in principle
agreement regarding the acquisition of Avmin"s 42,2% interest (286 305 263
shares) in Avgold Limited (Avgold) at R10,11 per share. The purchase price of
R2 894 million will be settled by the issue of 28 630 526 new Harmony shares.
This follows an announcement on 15 July 2003 that we had acquired 11,5% or 77
540 830 shares in Avgold at a consideration of R7,91 per Avgold share, which
was discharged by the issue of 6 960 964 new Harmony shares.
If the acquisition of the Avgold shares becomes unconditional, the company will
own approximately 54% of Avgold, and a mandatory offer of 1 Harmony share per
10 Avgold shares will be made to Avgold minorities. On an assumption of a 100%
acceptance of the offer a total of 60 259 832 new Harmony shares will be
issued. At a Harmony share price of R114,40 per share, (as at 19 January 2004)
the company will have a market capitalisation of R36,5 billion, making it one
of the ten largest companies listed on the JSE Securities Exchange, South
Africa.
Avgold owns the Target Mine in the Free State. The mine is expected to produce
in excess of 300 000 ounces per annum at a cash cost of US$230,00 per ounce,
even at the current strong South African Rand levels. The operation has a life
of mine of 18 years. Avgold also owns the prospective Target North Project area
which has a resource of 59,6 million ounces.
QUARTERLY OPERATIONAL REVIEW
A quarter on quarter pro-forma combined operating profit analysis of the
various operations is as follows:
December 2003 September 2003 Variance
Operations (R"million) (R"million) (R"million)
Free Gold 149 165 (16)
Free State 25 7 18
Evander 22 39 (17)
Randfontein 28 40 (12)
Elandskraal (29) (6) (23)
Welkom/Orkney 26 33 (7)
Kalgold 9 13 (4)
Australian Operation s 41 42 (1)
Total 271 333 (62)
CAPITAL EXPENDITURE
Actual Forecast
Operational capex December 2003 March 2004
Free State 12 10
Evander 23 27
Randfontein 15 12
Elandskraal 4 5
Kalgold
Free Gold 17 16
Welkom/Orkney 2
Australian Operations 46 40
Sub total 119 110
Actual Forecast
Project capex December 2003 March 2004
Doornkop South Reef 21 24
Elandsrand Shaft Deepening 25 22
Tshepong Decline 27 30
Phakisa Shaft 24 26
Nyala Shaft 7 4
Sub total 104 106
Total capex
Free State 12 10
Evander 23 27
Randfontein 36 36
Elandskraal 29 27
Kalgold
Free Gold 75 76
Welkom/Orkney 2
Australian Operations 46 40
Total 223 216
NOTICE OF INTERIM DIVIDEND
A dividend No. 78 of 40 cents per ordinary share being the interim dividend for
the six month period ending 31 December 2003, has been declared payable on 8
March 2004 to those shareholders registered as such in the books of the company
at the close of business on 5 March 2004.
The dividend is declared in the currency of the Republic of South Africa.
Any change in address or dividend instruction to apply to this dividend must be
received by the company"s transfer secretaries or registrar not later than 27
February 2004.
No dematerialisation or rematerialisation of share certificates may occur
between 1 March 2004 and 5 March 2004, both days inclusive, nor may any
transfers between registers take place during this period.
This announcement will be mailed to all registered holders on or about 2
February 2004.
Last day to trade ordinary shares cum dividend 27 February 2004
Ordinary shares trade ex dividend from 1 March 2004
Record date 5 March 2004
Payment date 8 March 2004
By order of the Board.
MP van der Walt
Company Secretary
Randfontein
26 January 2004
Operating and financial results (Rand/metric)
Underground production South Africa
Free Rand-
State Evander fontein
Dec-03 1 145 483 716
Ore milled t"000 Sep-03 1 156 538 694
Dec-03 5 078 2 768 3 244
Gold produced kg Sep-03 4 850 3 015 3 391
Dec-03 4,43 5,73 4,53
Yield g/t Sep-03 4,20 5,60 4,89
Cash operating Dec-03 81 566 78 154 77 007
Costs R/kg Sep-03 85 499 73 337 75 018
Cash operating Dec-03 362 448 349
Costs R/ton Sep-03 359 411 367
Working revenue Dec-03 435 492 237 494 276 427
(R"000) Sep-03 419 027 259 722 292 601
Cash operating Dec-03 414 190 216 330 249 812
Costs (R"000) Sep-03 414 668 221 110 254 388
Cash operating Dec-03 21 302 21 164 26 616
Profit (R"000) Sep-03 4 359 38 612 38 214
Underground production South Africa
Elands- Free Orkney/
kraal Gold Welkom
Dec-03 506 1 259 538
Ore milled t"000 Sep-03 491 1 254 560
Dec-03 2 527 8 364 3 012
Gold produced kg Sep-03 2 641 7 864 3 117
Dec-03 4,99 6,64 5,60
Yield g/t Sep-03 5,38 6,27 5,57
Cash operating Dec-03 95 485 68 416 76 076
Costs R/kg Sep-03 88 284 67 492 76 320
Cash operating Dec-03 477 455 426
Costs R/ton Sep-03 475 423 425
Working revenue Dec-03 215 283 708 578 255 506
(R"000) Sep-03 227 545 680 764 270 724
Cash operating Dec-03 241 290 572 230 229 141
Costs (R"000) Sep-03 233 158 530 758 237 890
Cash operating Dec-03 (26 007) 136 349 26 365
Profit (R"000) Sep-03 (5 613) 150 006 32 835
Surface production
South Africa
Sub Free
total State Evander
Dec-03 4 647 422 45
Ore milled t"000 Sep-03 4 693 227 47
Dec-03 24 993 200 30
Gold produced kg Sep-03 24 878 133 31
Dec-03 5,38 0,47 0,67
Yield g/t Sep-03 5,30 0,59 0,66
Cash operating Dec-03 76 941 67 064 52 067
Costs R/kg Sep-03 76 050 70 238 58 903
Cash operating Dec-03 414 32 35
Costs R/ton Sep-03 403 41 39
Working revenue Dec-03 2 128 780 16 907 2 498
(R"000) Sep-03 2 150 384 11 458 2 713
Cash operating Dec-03 1 922 992 13 413 1 562
Costs (R"000) Sep-03 1 891 971 9 342 1 826
Cash operating Dec-03 205 788 3 495 936
Profit (R"000) Sep-03 258 413 2 117 887
Surface production South Africa
Rand- Elands- Free
fontein kraal Gold
Dec-03 530 114 869
Ore milled t"000 Sep-03 546 296 1 102
Dec-03 137 47 558
Gold produced kg Sep-03 141 118 742
Dec-03 0,26 0,41 0,64
Yield g/t Sep-03 0,26 0,40 0,67
Cash operating Dec-03 74 241 149 489 63 614
Costs R/kg Sep-03 72 184 93 102 65 736
Cash operating Dec-03 19 62 41
Costs R/ton Sep-03 19 37 44
Working revenue Dec-03 11 804 3 964 47 403
(R"000) Sep-03 12 214 10 135 64 242
Cash operating Dec-03 10 171 7 026 35 471
Costs (R"000) Sep-03 10 178 10 986 48 776
Cash operating Dec-03 1 633 (3 062) 11 932
Profit (R"000) Sep-03 2 036 (851) 15 466
Surface production
South Africa
Open- South
Sub cast Africa
total Kalgold Total
Dec-03 1 980 327 6 954
Ore milled t"000 Sep-03 2 218 367 7 278
Dec-03 972 643 26 608
Gold produced kg Sep-03 1 165 779 26 822
Dec-03 0,49 1,97 3,83
Yield g/t Sep-03 0,53 2,12 3,69
Cash operating Dec-03 69 620 70 628 76 521
Costs R/kg Sep-03 69 620 69 199 75 572
Cash operating Dec-03 34 139 293
Costs R/ton Sep-03 37 147 279
Working revenue Dec-03 82 576 54 303 2 265 660
(R"000) Sep-03 100 763 67 227 2 318 374
Cash operating Dec-03 67 643 45 414 2 036 049
Costs (R"000) Sep-03 81 108 53 906 2 026 985
Cash operating Dec-03 14 934 8 890 229 611
Profit (R"000) Sep-03 19 655 13 321 291 389
Aus-
tralia Harmony
Total Total
Dec-03 1 229 8 183
Ore milled t"000 Sep-03 1 316 8 594
Dec-03 2 687 29 294
Gold produced kg Sep-03 3 323 30 145
Dec-03 2,19 3,58
Yield g/t Sep-03 2,53 3,51
Cash operating Dec-03 69 618 75 888
Costs R/kg Sep-03 73 280 75 319
Cash operating Dec-03 152 272
Costs R/ton Sep-03 185 264
Working revenue Dec-03 228 414 2 494 074
(R"000) Sep-03 285 059 2 603 433
Cash operating Dec-03 187 034 2 223 083
Costs (R"000) Sep-03 243 511 2 270 496
Cash operating Dec-03 41 379 270 991
Profit (R"000) Sep-03 41 548 332 937
Total Operations quarterly financial results (Rand/metric) (unaudited)
Quarter ended Quarter ended
31 December 30 September
2003 2003
(including (excluding
ARMgold) ARMgold)
Ore milled t"000 8 183 6 854
Gold produced kg 29 294 22 725
Gold price received R/kg 85 139 86 258
Cash operating costs R/kg 75 888 76 693
R million R million
Gold sales 2 494 1 960
Cash operating costs 2 223 1 743
Cash operating profit 271 217
Income from associates (34) (7)
Amortisation (246) (142)
Profit on sale of Highland & High River 522
Mark to market of financial instruments 11 (172)
Rehabilitation cost provision (18) (10)
Employment termination costs (20) (12)
Other income net 65 70
Minority Interest (6)
Interest paid (107) (55)
Corporate, marketing and new business
expenditure (43) (31)
Exploration expenditure (35) (14)
Foreign exchange losses (50) (31)
Profit before taxation 310 (187)
South African normal taxation
Current tax (84) (18)
Deferred tax 10 86
Net earnings 236 (119)
Earnings per share cents*
Basic earnings 92 (62)
Headline earnings (66) (67)
Fully diluted earnings** 92 (62)
Dividends per share cents
Proposed interim 40
Prepared in accordance with International Financial Reporting Standards
* Calculated on weighted number of shares in issue at quarter end
December 2003: 257,9 million (September 2003: 192,3 million)
** Calculated on weighted average number of diluted shares in
issue at quarter end December 2003: 256,5 million
(September 2003: 190,9 million)
Reconciliation of headline earnings:
Net earnings 236 (119)
Adjustments:
Profit on sale of assets (3) (9)
Profit on sale of Highland &
High River net of tax (444)
Amortisation on goodwill 41
Headline earnings (170) (128)
Total Operations pro forma quarterly financial results
(Rand/metric) (unaudited)
Quarter ended Quarter ended
31 December 30 September
2003 2003
(including (including
ARMgold) ARMgold)
Ore milled t"000 8 183 8 594
Gold produced kg 29 294 30 145
Gold price received R/kg 85 139 86 364
Cash operating costs R/kg 75 888 75 319
R million R million
Gold sales 2 494 2 603
Cash operating costs 2 223 2 270
Cash operating profit 271 333
Income from associates (34) (11)
Amortisation (246) (166)
Profit on sale of Highland & High River 522
Mark to market of financial instruments 11 (172)
Rehabilitation cost provision (18) (17)
Employment termination costs (20) (20)
Other income net 65 121
Minority Interest (6)
Interest paid (107) (83)
Corporate, marketing and new business
expenditure (43) (42)
Exploration expenditure (35) (14)
Foreign exchange losses (50) (31)
Profit before taxation 310 (102)
South African normal taxation
Current tax (84) (35)
Deferred tax 10 76
Net earnings 236 (61)
Earnings per share cents*
Basic earnings 92 (24)
Headline earnings (66) (28)
Fully diluted earnings** 92 (24)
Dividends per share cents
Proposed interim 40
The pro forma quarterly financial results are for information purposes only.
* Calculated on weighted number of shares in issue at quarter end
December 2003: 257,9 million (September 2003: 256,0 million)
** Calculated on weighted average number of diluted shares in
issue at quarter end December 2003: 256,5 million
(September 2003: 254,6 million)
Reconciliation of headline earnings:
Net earnings 236 (61)
Adjustments:
Profit on sale of assets (3) (11)
Profit on sale of Highland & High River net of tax (444)
Amortisation on goodwill 41
Headline earnings (170) (72)
Abridged balance sheet (Rand) (unaudited)
At At
31 December 30 September
2003 2003
R million R million
Employment of capital
Mining assets after amortisation 14 911 14 729
Intangible assets 2 803 2 843
Investments 1 098 1 260
Investments in associates 2 564 2 896
Net current liabilities (excluding cash) (924) (1 300)
Cash 2 888 2 561
Total assets 23 340 22 989
Capital employed
Shareholders" equity 16 251 15 937
Loans 2 863 2 881
Long-term provisions 860 840
Minority Interest 155 139
Unrealised hedging loss 432 450
Deferred tax 2 779 2 742
Total equity and liabilities 23 340 22 989
Basis of accounting
The unaudited results for the quarter have been prepared on the International
Financial Reporting Standards (IFRS) basis. These consolidated quarterly
statements are prepared in accordance with IFRS 34, Interim Financial
Reporting. The accounting policies are consistent with those applied in the
previous financial year.
Issued share capital: 258,4 million ordinary shares of 50 cents each (September
2003: 257,9 million shares)
28
Operating and financial results (US$/imperial)
Underground production South Africa
Free Rand-
State Evander fontein
Dec-03 1,263 533 790
Ore milled t"000 Sep-03 1,275 593 765
Gold produced Dec-03 163,261 88,993 104,297
oz Sep-03 155,930 96,934 109,023
Dec-03 0.13 0.17 0.13
Yield oz/t Sep-03 0.12 0.16 0.14
Cash operating Dec-03 376 360 355
Costs $/oz Sep-03 359 308 315
Cash operating Dec-03 49 60 47
Costs $/t Sep-03 44 50 45
Working revenue Dec-03 64,555 35,205 40,976
($"000) Sep-03 56,500 35,020 39,453
Cash operating Dec-03 61,397 32,067 37,031
Costs ($"000) Sep-03 55,912 29,814 34,301
Cash operating Dec-03 3,158 3,137 3,945
Profit ($"000) Sep-03 588 5,206 5,153
Underground production South Africa
Elands- Free Orkney/
kraal Gold Welkom
Dec-03 558 1,388 593
Ore milled t"000 Sep-03 541 1,383 618
Gold produced Dec-03 81,245 268,908 96,838
oz Sep-03 84,910 252,832 100,213
Dec-03 0.15 0.19 0.16
Yield oz/t Sep-03 0.16 0.18 0.16
Cash operating Dec-03 440 315 351
Costs $/oz Sep-03 370 283 320
Cash operating Dec-03 64 61 57
Costs $/t Sep-03 58 52 52
Working revenue Dec-03 31,912 105,035 37,875
($"000) Sep-03 30,681 91,792 36,503
Cash operating Dec-03 35,767 84,824 33,966
Costs ($"000) Sep-03 31,438 71,565 32,076
Cash operating Dec-03 (3,855) 20,211 3,908
Profit ($"000) Sep-03 (757) 20,226 4,427
Surface production South Africa
Sub Free
total State Evander
Dec-03 5,124 465 50
Ore milled t"000 Sep-03 5,175 250 52
Gold produced Dec-03 803,540 6,430 965
oz Sep-03 799,843 4,276 997
Dec-03 156.81 0.01 0.02
Yield oz/t Sep-03 154.56 0.02 0.02
Cash operating Dec-03 355 309 240
Costs $/oz Sep-03 319 295 247
Cash operating Dec-03 56 4 5
Costs $/t Sep-03 49 5 5
Working revenue Dec-03 315,557 2,506 370
($"000) Sep-03 289,950 1,545 366
Cash operating Dec-03 285,052 1,988 232
Costs ($"000) Sep-03 255,106 1,260 246
Cash operating Dec-03 30,505 518 139
Profit ($"000) Sep-03 34,843 285 120
Surface production South Africa
Rand- Elands- Free
fontein kraal Gold
Dec-03 584 126 958
Ore milled t"000 Sep-03 602 326 1,215
Gold produced Dec-03 4,405 1,511 17,927
oz Sep-03 4,533 3,794 23,856
Dec-03 0.01 0.01 0.02
Yield oz/t Sep-03 0.01 0.01 0.02
Cash operating Dec-03 342 689 293
Costs $/oz Sep-03 303 390 276
Cash operating Dec-03 3 8 5
Costs $/t Sep-03 2 5 5
Working revenue Dec-03 1,750 588 7,027
($"000) Sep-03 1,647 1,367 8,662
Cash operating Dec-03 1,508 1,041 5,258
Costs ($"000) Sep-03 1,372 1,481 6,577
Cash operating Dec-03 242 (454) 1,769
Profit ($"000) Sep-03 275 (115) 2,085
Surface production
South Africa
Open- South
Sub cast Africa
total Kalgold Total
Dec-03 2,183 361 7,668
Ore milled t"000 Sep-03 2,446 405 8,026
Gold produced Dec-03 31,238 20,673 855,450
oz Sep-03 37,455 25,045 862,343
Dec-03 14.31 0.06 111.56
Yield oz/t Sep-03 15.31 0.06 107.45
Cash operating Dec-03 321 326 353
Costs $/oz Sep-03 292 290 317
Cash operating Dec-03 5 19 39
Costs $/t Sep-03 4 18 34
Working revenue Dec-03 12,241 8,050 335,847
($"000) Sep-03 13,586 9,065 312,601
Cash operating Dec-03 10,027 6,732 301,811
Costs ($"000) Sep-03 10,936 7,268 273,311
Cash operating Dec-03 2,214 1,318 34,036
Profit ($"000) Sep-03 2,650 1,796 39,290
Aus-
tralia Harmony
Total Total
Dec-03 1,355 9,024
Ore milled t"000 Sep-03 1,451 9,477
Gold produced Dec-03 86,376 941,826
oz Sep-03 106,836 969,180
Dec-03 0.06 104.37
Yield oz/t Sep-03 0.07 102.27
Cash operating Dec-03 321 350
Costs $/oz Sep-03 307 316
Cash operating Dec-03 20 37
Costs $/t Sep-03 23 32
Working revenue Dec-03 33,859 369,706
($"000) Sep-03 38,436 351,037
Cash operating Dec-03 27,725 329,536
Costs ($"000) Sep-03 32,834 306,145
Cash operating Dec-03 6,134 40,170
Profit ($"000) Sep-03 5,602 44,892
Total Operations quarterly financial results (US$/imperial) (unaudited)
Quarter ended Quarter ended
31 December 30 September
2003 2003
(including (excluding
ARMgold) ARMgold)
Ore milled t"000 9,023 7,559
Gold produced oz 941,814 730,622
Gold price received $/oz 393 362
Cash operating costs $/oz 350 322
$million $million
Gold sales 370 264
Cash operating costs 330 235
Cash operating profit 40 29
Income from associates (5) (1)
Amortisation (37) (19)
Profit on sale of Highland & High River 77
Mark to market of financial instruments 2 (23)
Rehabilitation cost provision (3) (1)
Employment termination costs (3) (2)
Other income net 10 9
Minority Interest (1)
Interest paid (16) (7)
Corporate, marketing and new business
expenditure (6) (4)
Exploration expenditure (5) (2)
Foreign exchange losses (7) (4)
Profit before taxation 46 (25)
South African normal taxation
Current tax (12) (2)
Deferred tax 1 11
Net earnings 35 (16)
Earnings per share cents*
Basic earnings 14 (8)
Headline earnings (10) (9)
Fully diluted earnings** 14 (8)
Dividends per share cents
Proposed interim 6
Prepared in accordance with International Financial Reporting Standards
Currency conversion rates average for the quarter:
December 2003: US$1=R6,75 (September 2003: US$1=R7,42)
*Calculated on weighted number of shares in issue at quarter end
December 2003: 257,9 million (September 2003: 192,3 million)
**Calculated on weighted average number of diluted shares in
issue at quarter end December 2003: 256,5 million
(September 2003: 190,9 million)
Reconciliation of headline earnings:
Net earnings 35 (16)
Adjustments:
Profit on sale of assets (1) (1)
Profit on sale of Highland & High River net of tax (66)
Amortisation on goodwill 7
Headline earnings (25) (17)
Total operations pro forma quarterly financial results
(US$/imperial) (unaudited)
Quarter ended Quarter ended
31 December 30 September
2003 2003
(including (including
ARMgold) ARMgold)
Ore milled t"000 9,024 9,477
Gold produced oz 941,826 969,179
Gold price received $/oz 393 362
Cash operating costs $/oz 350 316
$million $million
Gold sales 370 351
Cash operating costs 330 306
Cash operating profit 40 45
Income from associates (5) (1)
Amortisation (37) (22)
Profit on sale of Highland & High River 77
Mark to market of financial instruments 2 (23)
Rehabilitation cost provision (3) (2)
Employment termination costs (3) (3)
Other income net 10 15
Minority Interest (1)
Interest paid (16) (11)
Corporate, marketing and new business
expenditure (6) (6)
Exploration expenditure (5) (2)
Foreign exchange losses (7) (4)
Profit before taxation 46 (14)
South African normal taxation
Current tax (12) (5)
Deferred tax 1 11
Net earnings 35 (8)
Earnings per share cents *
Basic earnings 14 (3)
Headline earnings (10) (4)
Fully diluted earnings ** 14 (3)
Dividends per share cents
Proposed interim 6
The pro forma quarterly financial results are for information purposes only.
Currency conversion rates average for the quarter:
December 2003: US$1=R6,75 (September 2003: US$1=R7,42)
* Calculated on weighted number of shares in issue at quarter end
December 2003: 257,9 million (September 2003: 256,0 million)
** Calculated on weighted average number of diluted shares in
issue at quarter end December 2003: 256,5 million
(September 2003: 254,6 million)
Reconciliation of headline earnings:
Net earnings 35 (8)
Adjustments:
Profit on sale of assets (1) (1)
Profit on sale of Highland & High River net of tax (66)
Amortisation on goodwill 7
Headline earnings (25) (9)
Abridged balance sheet (US$) (unaudited)
At At
31 December 30 September
2003 2003
R million R million
Employment of capital
Mining assets after amortisation 2 226 2 116
Intangible assets 418 408
Investments 164 181
Investments in associates 383 416
Net current (liabilities) excluding cash (138) (186)
Cash 431 368
Total assets 3 484 3 303
Capital employed
Shareholders" equity 2 426 2 290
Loans 427 414
Long-term provisions 129 120
Minority Interest 23 20
Unrealised hedging loss 64 65
Deferred tax 415 394
Total equity and liabilities 3 484 3 303
Basis of accounting
The unaudited results for the quarter have been prepared on the International
Financial Reporting Standards (IFRS) basis. These consolidated quarterly
statements are prepared in accordance with IFRS 34, Interim Financial
Reporting. The accounting policies are consistent with those applied in the
previous financial year.
Issued share capital: 258,4 million ordinary shares of 50 cents each.
(September 2003: 257,9 million shares)
Balance sheet converted at conversion rate of US$1 = R6,70 (September 2003:
R6,96)
Condensed statement of changes in shareholders" equity (unaudited)
At At At At
31 December 31 December 31 December 31 December
2003 2002 2003 2002
R million R million US$ million US$ million
Balance as at
the beginning
of the
financial year 8 628 7 963 1 288 931
Currency
translation
adjustment
and other (455) 1 (52)
Issue of share
capital 7 798 213 1 164 25
Net earnings 117 883 17 103
Dividends paid (292) (741) (44) (87)
Balance as at
the end of
December 16 251 7 863 2 426 920
Prepared in accordance with International Financial Reporting Standards.
Abridged cashflow statements (unaudited)
6 months 6 months 6 months 6 months
ended ended ended ended
31 Dec. 31 Dec. 31 Dec. 31 Dec.
2002 2003 2003 2002
US$"000 US$"000 R"000 R"000
125 19 Cash flow from operating activities 133 1 251
(62) 191 Cash utilised in investing activities 1 350 (618)
(64) (40) Cash utilised in financing activities (282) (635)
30 36 Translation adjustment
29 206 Increase/(decrease) in cash and equivalents 1 201 (2)
139 225 Opening cash and equivalents 1 687 1 441
168 431 Closing cash and equivalents 2 888 1 439
Prepared in accordance with International Financial Reporting Standards.
Operating activities translated at average rates of:
December 2003: US$1 = R7,08
(December 2002: US$1 = R10,00)
Closing balance translated at closing rates of:
December 2003: US$1 = R6,70
(December 2002: US$1 = R8,55)
Directors
P T Motsepe (Chairman),
Z B Swanepoel (Chief Executive),
F Abbott, Dr M M M M Bakane-Tuoane,
F Dippenaar, V N Fakude, T S A Grobicki,
W M Gule, M W King, D S Lushaba, M F Pleming,
Lord Renwick of Clifton KCMG*, C M L Savage,
Dr S P Sibisi, D V Simelane, Dr R V Simelane,
M V Sisulu, P Taljaard, A J Wilkens
*British
Investor Relations
Ferdi Dippenaar
Marketing Director
Telephone: +27 11 684 0140
Fax: +27 11 684 0188
E-mail: fdippenaar@harmony.co.za
Corn Bobbert
Investor Relations Officer
Telephone: +27 11 684 0146
Fax: +27 11 684 0188
E-mail: cbobbert@harmony.co.za
Marian van der Walt
Company Secretary
Telephone: +27 11 411 2037
Fax: +27 11 411 2398
E-mail: mvanderwalt@harmony.co.za
Date: 27/01/2004 08:01:10 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department