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HAR - Harmony - Unaudited Financial Review For The Third Quarter Ending

Release Date: 08/05/2008 08:00:17      Code(s): HAR
HAR - Harmony - Unaudited Financial Review For The Third Quarter Ending         
                   31 March 2008                                                
Harmony Gold Mining Company Ltd                                                 
Incorporated in the Republic of South Africa                                    
Registration number: 1950/038232/06                                             
Share code: HAR                                                                 
ISIN: ZAE000015228                                                              
("Harmony" or the "Company")                                                    
Trading Symbols                                                                 
JSE Limited                           HAR                                       
New York Stock Exchange, Inc.         HMY                                       
NASDAQ                                HMY                                       
London Stock Exchange plc             HRM                                       
Euronext Paris                        HG                                        
Euronext Brussels                     HMY                                       
Berlin Stock Exchange                 HAM1                                      
Issuer code                           HAPS                                      
UNAUDITED FINANCIAL REVIEW FOR THE THIRD QUARTER ENDING 31 MARCH 2008           
QUARTERLY HIGHLIGHTS                                                            
- Harmony announces Newcrest as PNG partner                                     
- Total cash operating cost down by 8.9%                                        
- Cash operating profit increased to R828 million                               
- Headline earnings of 42 cents per share for continuing operations             
- Restructuring complete, benefits to flow                                      
FINANCIAL SUMMARY FOR THE THIRD QUARTER ENDING 31 MARCH 2008                    
(All results exclude Discontinued Operations unless otherwise indicated)        
                                                 Quarter           Quarter      
March 2008     December 2007      
Gold produced                     - kg             10 347            12 403     
                                 - oz            332 662           398 764      
Cash costs                        - R/kg          145 514           133 234     
- $/oz              609               613      
Cash operating profit             - Rm                828               450     
                                 - US$m              111                66      
Basic earnings/(loss)             - SA c/s             41              (49)     
- US c/s              6               (7)      
Headline earnings/(loss)          - SA c/s             42              (43)     
                                 - US c/s              6               (6)      
Fully diluted earnings/(loss)     - SA c/s             41              (48)     
- US c/s              6               (7)      
                                                   Q-on-Q     Year to date      
                                                 % change             2008      
Gold produced                     - kg              (16.6)           36 275     
- oz              (16.6)        1 166 263      
Cash costs                        - R/kg             (9.2)          136 608     
                                 - $/oz               0.7              598      
Cash operating profit             - Rm                84.0            1 594     
- US$m              68.2              225      
Basic earnings/(loss)             - SA c/s           183.7            (137)     
                                 - US c/s           185.7             (19)      
Headline earnings/(loss)          - SA c/s           197.7             (32)     
- US c/s           200.0              (5)      
Fully diluted earnings/(loss)     - SA c/s           185.4            (136)     
                                 - US c/s           185.7             (19)      
CHIEF EXECUTIVE`S REVIEW                                                        
Harmony has been through another demanding and active quarter of streamlining   
our operations in line with our strategic objectives. Much has been             
accomplished in the last two quarters and I am pleased with our progress to     
date. The accomplishments are attributed primarily to the sustained commitment  
and teamwork of Harmony`s passionate leaders and hard-working people throughout 
the company.                                                                    
Harmony`s internal leadership conference which was held over two days in March  
reinforced the elements of `Back to Basics`, which include production, safety,  
planning and reviewing, cost control and services. One of the most important    
aims of the conference is to spend quality time with the company`s leaders by   
exchanging and sharing of knowledge in a more inter-active and productive       
manner. The March conference facilitated both a keen understanding of the       
changing dynamics within Harmony and assisted leaders to focus on positioning   
the company for the challenges and opportunities ahead. We have been through    
some pain, but I am confident that we have turned the corner and can begin to   
build on the new foundation.                                                    
To this end, we have commenced the rebuilding phase and over the ensuing months 
the company`s leaders will roll-out the business strategy to all the shaft      
teams. Through strategically focused safety and productivity targets, we will   
begin to reflect improvements in the critical areas of production, tonnes per   
man, grade, cost reduction, but more importantly, in Rand/kg.                   
To accelerate the rebuilding phase, changes have already been effected to       
Harmony`s mining structure with the elimination of coaches and the              
re-introduction of mine captains and shift bosses to improve production levels. 
We have focused on our strategies of restructuring for profitability by         
shedding or closing high-cost operational areas and assets, and accelerating    
our underground and surface projects. Our restructuring has had sweeping        
implications for Harmony in that some of our high electricity consumption       
work-areas and high-cost operations have had to be closed and Conops terminated 
where it proved to be ineffective and inefficient. In this way, Harmony was     
able to absorb the 10% reduction in electricity supply because we were able to  
incorporate this challenge as another component of our restructuring efforts.   
However, we have submitted our request to Eskom for additional power that will  
be required by our projects as they begin to ramp-up to full capacity.          
Over the past two quarters the company`s staff complement has been reduced by   
5985 employees. A reduction of 1 421 employees was evident in the March 2008    
quarter. Noticeably the company`s restructuring phase has had a negative impact 
and consequences on productivity. The termination of Conops at three of our     
operations - Masimong during the December 2007 quarter; Elandsrand and Tshepong 
during the March 2008 quarter - caused the SA underground tonnages and, to some 
extent, the grade to drop due to the reduction of the labour force and, in some 
instances, transferring labour to other operations.                             
External factors also played their part. Harmony`s operations experienced a     
loss of production due to this year`s lengthy Christmas holiday period. The     
effects of a five-day power cut were felt and similarly when it was restored at 
80% of our previous consumption and thereafter the resultant build-up phase     
from 80% to 90% power supply. This resulted in an estimated total loss of more  
than 800 kilograms from our operations.                                         
Financials                                                                      
Harmony`s operational performance from its continuing operations for the        
quarter under review was disappointing with 7.2% lower tonnages at 4 125 000    
tonnes compared with 4 445 000 tonnes in the December quarter, resulting in a   
16.6% decrease in kilograms produced of 10 347kg versus 12 403kg.               
Total grade for the group was 10% lower at 2.51g/t, while the grade from our SA 
underground operations was recorded at 4.81g/t a 1.2% drop on the previous      
quarter. The company`s cash operating costs increased by 9.2% to R145 514/kg    
from R133 234/kg.                                                               
It is pleasing to note that some of our restructuring efforts were evident in   
this quarter with the R147 million reduction in working costs. Total cash       
operating costs were down 8.9% to R1 506 million from R1 652 million.           
A higher received gold price of US$944.40/oz and a weaker, thus more            
favourable, R/US$ exchange rate of R7.43/$ (R6.77/$) resulted in higher         
revenues of R2.3 billion compared with R2.1 billion and a net profit of R164    
million compared with a net loss of R195 million for the previous quarter.      
Headline earnings stood at 42 cents per share versus a loss of 43 cents per     
share for the December 2007 quarter.                                            
IT Financial System                                                             
We have made progress over the last two quarters with re-implementing the IT    
financial system and the retraining of all employees related to the job has     
commenced. We have performed the necessary checks and balances and we are       
confident that we will have a clean "bill of health" at the end of this         
financial year.                                                                 
Strengthening the balance sheet                                                 
We continued to forge ahead with our activities to create value, strengthen the 
company`s balance sheet and improve operational performance. Accordingly, we    
are determined to get all our operations on a sound footing with all operations 
profitable after taking capital expenditure into account. In our short-life     
operations we are considering ways of extending the life of mines. The          
operations have all the required infrastructure and we are considering options  
of increasing development capital.                                              
The conditions precedent for the R1.9 billion transaction with Pamodzi          
Resources Fund are progressing smoothly and we are confident that these should  
be fulfilled by end of June 2008. Mr John Munro who has been appointed Chief    
Executive Officer of the newly named Rand Uranium Company commenced duties on 5 
May 2008. We wish him every success with developing the new uranium entity into 
a world-class company in which we will hold a 40% stake.                        
On 17 January 2008, Harmony signed two separate transactions with African       
Precious Minerals (APM): in terms of the sale agreement APM would acquire 87% of
Jeanette Gold Mines Limited for a purchase consideration of 1 500 000 ordinary  
APM shares and 1 500 000 half warrants. The shares and warrants to be granted   
to Harmony are estimated at being worth US$7.5 million (R52.5 million) and      
constitutes an 11% shareholding in APM. The second transaction entails two      
earn-in agreements for the Evander 6 shaft and Twistdraai assets in the Evander 
basin. These are subject to and conditional upon the fulfilment of significant  
conditions precedent by APM.                                                    
I believe that the earn-in agreement with APM is an excellent way of            
progressing our low priority projects to bankable feasibility stage in the      
current positive gold-price environment. In addition, the formation of          
strategic alliances with other companies allows us to optimise the use of our   
resources without placing additional pressure on our capital expenditure.       
On 27 February 2008, Pamodzi Gold took full control of the Orkney assets        
following the fulfilment of all the conditions precedent. The R345 million      
purchase consideration for the assets was settled by the issuing of 30 million  
Pamodzi Gold shares, bringing Harmony`s shareholding in Pamodzi Gold to 32%.    
Although our Papua New Guinea (PNG) transaction was executed in the fourth      
quarter of 2008, I believe it prudent to make mention of the fact that Harmony  
and Newcrest Mining Limited of Australia signed a 50:50% joint venture          
agreement on 22 April 2008 for the development of Harmony`s PNG assets.         
Newcrest will earn its 50% interest in the new joint venture by contributing a  
maximum of US$525 million which will be paid in two tranches. An initial US$180 
million payment to acquire a 30.01% interest by 30 June 2008, together with a   
reimbursement to Harmony of US$45 million in project expenditure, and a farm-in 
commitment for the remaining 19.99% of US$300 million, to fund project          
expenditure up to the commencement of mining operations at Hidden Valley.       
The introduction of a quality partner such as Newcrest with significant         
technical skills, particularly in copper mining and bulk underground mining     
techniques including block caving techniques will provide additional expertise  
to the existing Harmony team in PNG and will add to the development potential   
of the PNG assets.                                                              
For Harmony, the creation of this joint venture facilitates significant capital 
investment in the PNG assets and substantially removes Harmony`s obligation to  
continue funding the development of these assets entirely from our own cash     
flows. A further announcement will be made on SENS and in the press as soon as  
the financial effects are finalised.                                            
Class action                                                                    
We have been made aware of a pending class action in the United States of       
America against Harmony whereby some ADR holders are seeking damages pertaining 
to the company`s business practices. We have retained legal professionals in    
that country to advise Harmony.                                                 
THE THIRD QUARTER ENDING 31 MARCH 2008 UNDER REVIEW                             
Harmony`s SA continuing underground operations, delivered a disappointing       
operational performance for the third quarter ending 31 March 2008. Negative    
impacts included lower production and kilograms produced and loss of production 
due to the December holidays, the power outage and subsequent power build-up    
from 80% to the current 90%.                                                    
Tonnes Milled                                                                   
All of the company`s continued underground operations posted lower tonnages for 
the 31 March 2008 quarter. Tonnages decreased by 15.8% to 1 934 000 tonnes      
compared with 2 297 000 tonnes previously, resulting in the 16.8% drop in gold  
production from 11 175 kg to 9 302 kg for the quarter under review. Besides the 
above cited reasons the termination of Conops at a further two of the company`s 
operations, the restructuring at Evander 7 and Bambanani and the 18 days        
suspension of production at Doornkop all contributed to the lower performance.  
Recovery Grades                                                                 
Recovery grades were steady to marginally down at 4.81g/t from 4.87g/t.         
Cost Control                                                                    
Cash costs were higher throughout the company with the exception of Masimong    
where costs were well contained during the quarter. Although cost control       
measures were applied, operating costs increased by 8.9% to R150 795/kg from    
R138 531/kg previously, all as a result of lower kilogram production.           
Analysis of earnings per share                                                  
                                           Quarter ended     Quarter ended      
Earnings per share (SA cents)                  March 2008     December 2007     
Cash earnings                                         207               113     
Basic earnings/(loss)                                  41              (49)     
Headline earnings/(loss)                               42              (43)     
Fully diluted earnings/(loss)                          41              (48)     
CONDENSED CONSOLIDATED INCOME STATEMENT (Unaudited) (Rand)                      
                                                   Quarter ended                
                                         March      December         March      
Notes          2008          2007          2007      
                                                                         *      
                                     R million     R million     R million      
Continuing operations                                                           
Revenue                                   2 334         2 102         2 082     
Production cost                         (1 506)       (1 652)       (1 338)     
Amortisation and                                                                
depreciation                              (190)         (228)         (189)     
Corporate expenditure                      (55)          (68)          (44)     
Exploration expenditure                    (55)          (42)          (25)     
Care and maintenance costs                                                      
of restructured shafts                     (24)          (10)          (10)     
Employment termination and                                                      
restructuring costs             2          (86)          (75)             -     
Share based compensation                    (4)           (9)          (14)     
Gain/(loss) on financial                                                        
instruments                                   5          (14)          (24)     
Provision for doubtful debt                 (5)          (75)             -     
Other (expenses)/income -                                                       
net                                        (15)           (6)            24     
Operating profit/(loss)                     399          (77)           462     
Loss from associates                       (10)             -             -     
Mark-to-market of listed                                                        
investments                                   -             -            29     
Profit/(loss) on sale of                                                        
listed investments              6             -             -             1     
Profit on sale of                                                               
investment in associate                       -             -             -     
Investment income                            54            74            31     
Finance cost                              (123)         (138)         (101)     
Profit/(loss) before                                                            
taxation                                    320         (141)           422     
Taxation                                  (156)          (54)         (107)     
Net profit/(loss) from                                                          
continuing operations                       164         (195)           315     
Discontinued operations         3                                               
Profit/(loss) from                                                              
discontinued operations                      85           226          (67)     
Profit/(loss) on the sale                                                       
of assets                                   100          (51)             -     
(Loss)/profit from                                                              
measurement to                                                                  
fair value less cost to sell                (4)            66             -     
Net profit/(loss)                           345            46           248     
Earnings/(loss) per share                                                       
from continuing operations                                                      
attributable to the equity                                                      
holders of the company                                                          
during the year (cents)         4                                               
- Basic earnings/(loss)                      41          (49)            79     
- Headline earnings/(loss)                   42          (43)            78     
- Fully diluted                                                                 
earnings/(loss)                              41          (48)            78     
Earnings/(loss) per share                                                       
from discontinuing                                                              
operations attributable to                                                      
the equity holders                                                              
of the company during the                                                       
year (cents)                    4                                               
- Basic earnings/(loss)                      45            60          (17)     
- Headline earnings/(loss)                   21            57          (19)     
- Fully diluted                                                                 
earnings/(loss)                              45            59          (17)     
Total earnings/(loss) per                                                       
share from all                                                                  
operations attributable to                                                      
the equity holders                                                              
of the company during the                                                       
year (cents)                    4                                               
- Basic earnings/(loss)                      86            11            62     
- Headline earnings                          63            14            59     
- Fully diluted                                                                 
earnings/(loss)                              86            11            61     
                                                         Nine months ended      
                                                       March         March      
                                                        2008          2007      
*      
                                                   R million     R million      
Continuing operations                                                           
Revenue                                                 6 549         6 085     
Production cost                                       (4 955)       (4 073)     
Amortisation and depreciation                           (617)         (539)     
Corporate expenditure                                   (196)         (161)     
Exploration expenditure                                 (142)         (111)     
Care and maintenance costs of restructured shafts        (42)          (42)     
Employment termination and restructuring costs          (162)             -     
Share based compensation                                 (23)          (36)     
Gain/(loss) on financial instruments                      (5)            12     
Provision for doubtful debt                              (80)             -     
Other (expenses)/income - net                            (42)            95     
Operating profit/(loss)                                   285         1 230     
Loss from associates                                     (10)          (18)     
Mark-to-market of listed investments                       33            81     
Profit/(loss) on sale of listed investments             (459)             1     
Profit on sale of investment in associate                   -           236     
Investment income                                         194           102     
Finance cost                                            (383)         (283)     
Profit/(loss) before taxation                           (340)         1 349     
Taxation                                                (207)         (342)     
Net profit/(loss) from continuing operations            (547)         1 007     
Discontinued operations                                                         
Profit/(loss) from discontinued operations                289           (6)     
Profit/(loss) on the sale of assets                        28             -     
(Loss)/profit from measurement to                                               
fair value less cost to sell                               55             -     
Net profit/(loss)                                       (175)         1 001     
Earnings/(loss) per share from continuing operations                            
attributable to the equity holders of the company                               
during the year (cents)                                                         
- Basic earnings/(loss)                                 (137)           253     
- Headline earnings/(loss)                               (32)           175     
- Fully diluted earnings/(loss)                         (136)           250     
Earnings/(loss) per share from discontinuing                                    
operations attributable to the equity holders                                   
of the company during the year (cents)                                          
- Basic earnings/(loss)                                    93           (2)     
- Headline earnings/(loss)                                 67           (4)     
- Fully diluted earnings/(loss)                            92           (1)     
Total earnings/(loss) per share from all                                        
operations attributable to the equity holders                                   
of the company during the year (cents)                                          
- Basic earnings/(loss)                                  (44)           251     
- Headline earnings                                        35           171     
- Fully diluted earnings/(loss)                          (44)           249     
* The comparative figures were adjusted to exclude further discontinued         
operations and interest capitalised, but not adjusted for approximately R250    
million in cost, relating to the March 2007 quarter that was only captured in   
the June 2007 quarter, as previously reported.                                  
CONDENSED CONSOLIDATED BALANCE SHEET (Rand)                                     
                                        At              At              At      
                                     March        December            June      
                                      2008            2007            2007      
Notes     (Unaudited)      (Reviewed)       (Audited)      
                                 R million       R million       R million      
Assets                                                                          
Non-current assets                                                              
Property, plant and                                                             
equipment                            26 407          25 133          24 506     
Intangible assets         5           2 477           2 307           2 307     
Restricted cash                          80              81               5     
Investments in                                                                  
financial assets          6           1 413           1 402           1 387     
Investments in                                                                  
associates                7             341               7               7     
Deferred income tax                   2 711           2 462           2 321     
Trade and other                                                                 
receivables                               7              39              95     
                                    33 436          31 431          30 628      
Current assets                                                                  
Inventories                             654             709             742     
Investments in                                                                  
financial assets          6               -               -           2 484     
Trade and other                                                                 
receivables                             993             851             918     
Income and mining taxes                  58              41              66     
Restricted cash                           -               -             274     
Cash and cash                                                                   
equivalents                             346             425             711     
                                     2 051           2 026           5 195      
Non-current assets                                                              
classified as held                                                              
for sale                  3           1 716           2 001           1 284     
                                     3 767           4 027           6 479      
Total assets                         37 203          35 458          37 107     
Equity and liabilities                                                          
Share capital and                                                               
reserves                                                                        
Share capital             5          25 866          25 677          25 636     
Other reserves                          731              84           (349)     
Accumulated loss                    (1 779)         (2 124)         (1 604)     
                                    24 818          23 637          23 683      
Non-current liabilities                                                         
Borrowings                8           1 918           1 878           1 743     
Deferred income tax                   5 310           5 191           5 031     
Provisions for other                                                            
liabilities and charges               1 078           1 082           1 216     
8 306           8 151           7 990      
Current liabilities                                                             
Trade and other                                                                 
payables                                722             686           1 488     
Income and mining taxes                 195              73              50     
Provisions and                                                                  
accrued liabilities                     261             222             267     
Borrowings                8           2 009           1 995           2 855     
Bank overdraft                            -               -             220     
Shareholders for                                                                
dividends                                 6               7               7     
                                     3 193           2 983           4 887      
Liabilities directly                                                            
associated with                                                                 
non-current assets                                                              
classified as held                                                              
for sale                  3             886             687             547     
                                     4 079           3 670           5 434      
Total equity and                                                                
liabilities                          37 203          35 458          37 107     
Number of ordinary                                                              
shares in issue                 402 818 020     400 196 978     399 608 384     
Net asset value per                                                             
share (cents)                         6 161           5 906           5 927     
The accompanying notes are an integral part of these condensed consolidated     
financials statements.                                                          
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) (Rand)        
                                                Issued share         Other      
capital      reserves      
                                                   R million     R million      
Balance - 30 June 2007 (as previously reported)        25 636         (349)     
Change in accounting policy for the                                             
capitalisation                                                                  
of interest on assets under construction                    -             -     
Balance - 30 June 2007 (restated)                      25 636         (349)     
Issue of share capital                                    230             -     
Currency translation adjustment and other                   -         1 080     
Net loss                                                    -             -     
Balance as at 31 March 2008                            25 866           731     
Balance - 30 June 2006 (as previously reported)        25 489         (271)     
Change in accounting policy for the                                             
capitalisation                                                                  
of interest on assets under construction                    -             -     
Balance - 30 June 2006 (restated)                      25 489         (271)     
Issue of share capital                                    101             -     
Currency translation adjustment and other                   -           192     
Net profit                                                  -             -     
Balance as at 31 March 2007                            25 590          (79)     
Accumulated                    
                                                        loss         Total      
                                                   R million     R million      
Balance - 30 June 2007 (as previously reported)       (1 681)        23 606     
Change in accounting policy for the capitalisation                              
of interest on assets under construction                   77            77     
Balance - 30 June 2007 (restated)                     (1 604)        23 683     
Issue of share capital                                      -           230     
Currency translation adjustment and other                   -         1 080     
Net loss                                                (175)         (175)     
Balance as at 31 March 2008                           (1 779)        24 818     
Balance - 30 June 2006 (as previously reported)       (2 015)        23 203     
Change in accounting policy for the capitalisation                              
of interest on assets under construction                   48            48     
Balance - 30 June 2006 (restated)                     (1 967)        23 251     
Issue of share capital                                      -           101     
Currency translation adjustment and other                   -           192     
Net profit                                              1 001         1 001     
Balance as at 31 March 2007                             (966)        24 545     
CONDENSED CONSOLIDATED CASH FLOW STATEMENT (Unaudited) (Rand)                   
Three months ended      
                                                       March      December      
                                       Notes            2008          2007      
                                                   R million     R million      
Cash flow from operating activities                                             
Cash generated/(utilised) by operations                   794         (376)     
Interest and dividends received                            64            76     
Interest paid                                           (123)         (118)     
Income and mining taxes paid                             (41)           (9)     
Cash generated/(utilised) by operating                                          
activities                                                694         (427)     
Cash flow from investing activities                                             
Decrease/(increase) in restricted cash                     20          (71)     
Net proceeds on disposal of listed                                              
investments                                                 -             -     
Net additions to property, plant and                                            
equipment                                               (884)         (734)     
Other investing activities                                  6            65     
Cash utilised by investing activities                   (858)         (740)     
Cash flow from financing activities                                             
Long-term loans raised                                      -            10     
Long-term loans repaid                                    (6)             -     
Ordinary shares issued - net of expenses                   40             5     
Cash generated by financing activities                     34            15     
Foreign currency translation adjustments                   43            16     
Net (decrease)/increase in cash and                                             
equivalents                                              (87)       (1 136)     
Cash and equivalents - beginning of period                435         1 571     
Cash and equivalents - end of period        9             348           435     
                                                         Nine months ended      
                                                       March         March      
                                                        2008          2007      
R million     R million      
Cash flow from operating activities                                             
Cash generated/(utilised) by operations                   472         1 469     
Interest and dividends received                           209           117     
Interest paid                                           (300)         (143)     
Income and mining taxes paid                             (62)           (3)     
Cash generated/(utilised) by operating activities         319         1 440     
Cash flow from investing activities                                             
Decrease/(increase) in restricted cash                    223             -     
Net proceeds on disposal of listed investments          1 310           229     
Net additions to property, plant and equipment        (2 451)       (1 765)     
Other investing activities                                 20          (66)     
Cash utilised by investing activities                   (898)       (1 602)     
Cash flow from financing activities                                             
Long-term loans raised                                  2 098           151     
Long-term loans repaid                                (1 808)             -     
Ordinary shares issued - net of expenses                   64           101     
Cash generated by financing activities                    354           252     
Foreign currency translation adjustments                   79          (11)     
Net (decrease)/increase in cash and equivalents         (146)            79     
Cash and equivalents - beginning of period                494           906     
Cash and equivalents - end of period                      348           985     
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE                
QUARTER AND NINE MONTHS ENDED 31 MARCH 2008                                     
1. Accounting policies                                                          
(a) Basis of accounting                                                         
The condensed consolidated interim financial statements for the period ended 31 
March 2008 have been prepared using accounting policies that comply with        
International Financial Reporting Standards (IFRS), which are consistent with   
the accounting policies used in the audited annual financial statements for the 
year ended 30 June 2007, except for accounting policy changes made after the    
date of the annual financial statements. These condensed consolidated interim   
financial statements are prepared in accordance with IAS 34, Interim Financial  
Reporting, and should be read in conjunction with the financial statements for  
the year ended 30 June 2007.                                                    
New accounting standards and IFRIC interpretations                              
Certain new accounting standards and IFRIC interpretations have been published  
that are mandatory for accounting periods beginning on or after 1 January 2008. 
These new standards and interpretations have not been early adopted by the      
Group and a reliable estimate of the impact of the adoption thereof for the     
Group cannot yet be determined for all of them, as management are still in the  
process of determining the impact thereof on future financial statements.       
At the date of finalising of these financial statements, the following          
Standards and Interpretations were in issue but not yet effective:              
Title                                   Effective date                          
New Statement                                                                   
-    IFRS 8 Operating Segments        ^ Financial year commencing on or after   
                                        1 January 2009                          
Amendments                                                                      
- IAS 1 (Revised) - Presentation of    ^ Financial year commencing on or after  
Financial Statements Revised             1 January 2009                         
- IAS 27 (Revised) - Consolidated      # Financial year commencing on or after  
and Separate Financial Statements        1 July 2009                            
- IAS 32 (Revised) - Financial         # Financial year commencing on or after  
Instruments: Presentation                1 January 2009                         
- IFRS 2 (Revised) - Share-based       # Financial year commencing on or after  
Payments                                 1 January 2009                         
- IFRS 3 (Revised) - Business          # Financial year commencing on or after  
Combinations                             1 July 2009                            
New Interpretation                                                              
- IFRIC 12 - Service Concession        * Financial year commencing on or after  
Arrangements                             1 January 2008                         
- IFRIC 13 - Customer Loyalty          * Financial year commencing on or after  
Programmes                               1 July 2008                            
- IFRIC 14 - IAS 19 The Limit on       # Financial year commencing on or after  
a Defined Benefit Asset,                 1 January 2008                         
Minimum Funding Requirements and their                                          
Interactions                                                                    
^ Affects disclosure                                                            
* Will not impact materially                                                    
# Not yet assessed                                                              
(b) Implementation of accounting policy                                         
IAS 23 (Revised) - Borrowing Costs: The company early adopted IAS 23 (Revised)  
- Borrowing Costs, retrospectively as of 1 July 2000, which requires that       
management capitalise borrowing costs directly attributable to the acquisition  
and construction of qualifying assets. Qualifying assets are assets that take a 
substantial time to get ready for their intended use.                           
The impact of this adjustment was as follows:                                   
                                                Quarter ended                   
                                   March          December           March      
2008              2007            2007      
                             (Unaudited)       (Unaudited)     (Unaudited)      
                               R million         R million       R million      
Effect on net loss:                                                             
Decrease in interest expense           11                22               5     
Income tax                            (3)               (7)             (1)     
Decrease in net loss                    8                15               4     
Effect on opening accumulated                                                   
loss:                                                                           
Decrease in interest expense          137               115              80     
Income tax                           (40)              (33)            (23)     
Decrease in accumulated loss           97                82              57     
Nine months ended      
                                                     March           March      
                                                      2008            2007      
                                               (Unaudited)     (Unaudited)      
R million       R million      
Effect on net loss:                                                             
Decrease in interest expense                             40              14     
Income tax                                             (12)             (4)     
Decrease in net loss                                     28              10     
Effect on opening accumulated loss:                                             
Decrease in interest expense                            108              68     
Income tax                                             (31)            (20)     
Decrease in accumulated loss                             77              48     
The borrowing costs are added to the cost of those assets, until such time as   
the assets are substantially ready for their intended use.                      
All other borrowing costs are dealt with in income in the period in which they  
are incurred.                                                                   
2. Employment termination and restructuring costs                               
During the December 2007 quarter, a voluntary retrenchment process was          
commenced due to the decision to decentralise services.                         
3. Non-current assets held for sale and discontinued operations                 
The assets and liabilities related to Mt Magnet and South Kal (operations in    
Australia), ARMgold Welkom and Orkney operations (operations in the Free State  
and Northwest areas), and Kudu and Sable (operations in the Free State area),   
have been presented as held for sale on 30 June 2007.                           
On 6 December 2007, the sale relating to the South Kal operation (operation in  
Australia) was concluded at a loss, net of tax, of R51 million and the assets   
were derecognised.                                                              
On 27 February 2008, the sale relating to the Orkney operations (operations in  
the Northwest area) was concluded at a profit, net of tax, of R99 million and   
the assets were derecognised.                                                   
The assets and liabilities relating to the Cooke 1, Cooke 2, Cooke 3, Cooke     
plant and relating surface operations (operations in the Gauteng area) have     
been presented as held for sale following the approval of the Group`s           
management on 16 October 2007.                                                  
Underground operations at St Helena shaft were ceased during November 2007 and  
was classified as a discontinued operation.                                     
The comparative results have been restated due to these reclassifications.      
4. Earnings/(loss) per share                                                    
Earnings/(loss) per share is calculated on the weighted average number of       
shares in issue for the quarter ended 31 March 2008: 400.7 million (31 December 
2007: 399.8 million, 31 March 2007: 398.4 million) and the nine months ended 31 
March 2008: 400.0 million (31 March 2007: 397.7 million).                       
The fully diluted earnings/(loss) per share is calculated on weighted average   
number of diluted shares in issue for the quarter ended 31 March 2008: 403.5    
million (31 December 2007: 402.1 million, 31 March 2007: 403.3 million) and the 
nine months ended 31 March 2008: 402.5 million (31 March 2007: 402.8 million).  
The effect of the share options is anti-dilutive.                               
Quarter ended                   
                                     March        December           March      
                                      2008            2007            2007      
                               (Unaudited)     (Unaudited)     (Unaudited)      
Total earnings/(loss) per share                                                 
(cents):                                                                        
Basic earnings/(loss)                    86              11              62     
Headline earnings                        63              14              59     
Fully diluted earnings/(loss)            86              11              61     
                                 R million       R million       R million      
Reconciliation of headline                                                      
earnings/(loss):                                                                
Continuing operations                                                           
Net profit/(loss)                       164           (195)             315     
Adjusted for:                                                                   
Profit on sale of property,                                                     
plant and equipment                     (1)            (29)             (4)     
(Profit)/loss on sale of listed                                                 
investment (Gold Fields)                  -               -             (1)     
Profit on sale of associate                                                     
(Western Areas)                           -               -               -     
Provision for doubtful debt               4              53               -     
Headline profit/(loss)                  167           (171)             310     
Discontinued operations                                                         
Net profit/(loss)                       181             241            (67)     
Adjusted for:                                                                   
(Profit)/loss on sale of                                                        
property,                                                                       
plant and equipment                   (100)              51               -     
Profit on sale of investments             -               -             (9)     
Impairment of assets/(reversal                                                  
of impairment)                            4            (66)               -     
Headline profit/(loss)                   85             226            (76)     
Total headline profit                   252              55             234     
                                                         Nine months ended      
                                                     March           March      
2008            2007      
                                               (Unaudited)     (Unaudited)      
Total earnings/(loss) per share (cents):                                        
Basic earnings/(loss)                                  (44)             251     
Headline earnings                                        35             171     
Fully diluted earnings/(loss)                          (44)             249     
                                                 R million       R million      
Reconciliation of headline earnings/(loss):                                     
Continuing operations                                                           
Net profit/(loss)                                     (547)           1 007     
Adjusted for:                                                                   
Profit on sale of property, plant and equipment        (28)            (90)     
(Profit)/loss on sale of listed investment                                      
(Gold Fields)                                           392             (1)     
Profit on sale of associate (Western Areas)               -           (220)     
Provision for doubtful debt                              57               -     
Headline profit/(loss)                                (126)             696     
Discontinued operations                                                         
Net profit/(loss)                                       372             (6)     
Adjusted for:                                                                   
(Profit)/loss on sale of property,                                              
plant and equipment                                    (49)               -     
Profit on sale of investments                             -            (10)     
Impairment of assets/(reversal of impairment)          (55)               -     
Headline profit/(loss)                                  268            (16)     
Total headline profit                                   142             680     
5. Intangible assets                                                            
On 28 March 2007, Harmony announced that it had concluded negotiations with Rio 
Tinto Limited ("Rio Tinto") in terms of which the parties have agreed that      
Harmony purchase the Rio Tinto rights under the royalty agreement, which was    
entered into prior to the acquisition by Harmony of the Hidden Valley and       
Kerimenge deposits in Papua New Guinea.                                         
In terms of the royalty agreement Rio Tinto had the rights to receive a portion 
of between 2% and 3.5% of future ounces produced by the Hidden Valley mine in   
Papua New Guinea.                                                               
The transaction between Harmony and Rio Tinto concluded on the 21 March 2008.   
The consideration paid by Harmony to Rio Tinto amounted to US$22.5 million and  
was settled as follows:                                                         
? The equivalent US$20 million in new ordinary shares of Harmony Gold Mining    
Company Limited, issued as fully paid-up; and                                   
? The balance of US$2.5 million paid in cash.                                   
6. Investment in financial assets                                               
                                       March        December          June      
                                        2008            2007          2007      
(Unaudited)     (Unaudited)     (Audited)      
                                   R million       R million     R million      
Current                                                                         
Investment in African Rainbow                                                   
Minerals Limited (see note 7)               -               -         1 051     
Investment in Gold Fields Limited*          -               -         1 433     
                                           -               -         2 484      
Non-current                                                                     
Environmental Trust Funds               1 271           1 233         1 332     
Other                                     142             169            55     
                                       1 413           1 402         3 871      
* During the September 2007 quarter Harmony sold all of its remaining Gold      
Fields Limited (GFI) shares for a loss of R459 million.                         
7. Investment in associate                                                      
On 27 February 2008, Pamodzi Gold Limited ("Pamodzi") bought the Orkney         
operations from the Harmony Group for a consideration of 30 000 000 Pamodzi     
shares. This resulted in Harmony Gold Mining Company owning 32.4% of Pamodzi.   
On 31 March 2008 the book value for the investment was R335.5 million.          
8. Borrowings                                                                   
                                        March       December          June      
2008           2007          2007      
                                  (Unaudited)     (Reviewed)     (Audited)      
                                    R million      R million     R million      
Unsecured long-term borrowings                                                  
Convertible unsecured fixed rate                                                
bonds                                    1 605          1 583         1 541     
Africa Vanguard Resources                                                       
(Proprietary) Limited                       32             32            32     
1 637          1 615         1 573      
Less: Short-term portion                     -              -             -     
Total unsecured long-term                                                       
borrowings                               1 637          1 615         1 573     
Secured long-term borrowings                                                    
Westpac Bank Limited*                      119            100             2     
Africa Vanguard Resources                                                       
(Doornkop) (Pty) Limited                                                        
(Nedbank Limited)                          188            181           170     
ARM Empowerment Trust 1                                                         
(Nedbank Limited)**                          -              -           450     
ARM Empowerment Trust 2                                                         
(Nedbank Limited)**                          -              -           601     
Rand Merchant Bank                           -              -         1 802     
Nedbank Limited                          2 000          2 000             -     
Less: Transaction costs                   (17)           (23)             -     
2 290          2 258         3 025      
Less: Short-term portion               (2 009)        (1 995)       (2 855)     
Total unsecured long-term                                                       
borrowings                                 281            263           170     
Total long-term borrowings               1 918          1 878         1 743     
* The lease was entered into for the purchase of mining fleet to be used on the 
Hidden Valley project.                                                          
** The guarantees relating to the Nedbank loans were cancelled on 28 September  
2007 and consequently Harmony has no further obligations to Nedbank.            
The ARM investment and associated Nedbank loans were derecognised from this     
date.                                                                           
The future minimum lease payments are as follows:                               
March       December          June      
                                         2008           2007          2007      
                                  (Unaudited)     (Reviewed)     (Audited)      
                                    R million      R million     R million      
Due within one year                         27             26             -     
Due between one and five years             102             97             -     
                                          129            123             -      
9. Cash and cash equivalents                                                    
Comprises of:                                                                   
                                        March       December         March      
                                         2008           2007          2007      
                                  (Unaudited)     (Reviewed)                    
R million      R million     R million      
Continuing operations                      346            425           985     
Discontinued operations                      2             10             -     
Total cash and cash equivalents            348            435           985     
10. Commitments and Contingencies                                               
                                        March       December          June      
                                         2008           2007          2007      
                                  (Unaudited)     (Reviewed)     (Audited)      
R million      R million     R million      
Capital expenditure commitments                                                 
Contracts for capital expenditure        1 191            819           352     
Authorised by the directors but                                                 
not contracted for                       1 422          1 987         1 881     
                                        2 613          2 806         2 233      
This expenditure will be financed                                               
from existing resources                                                         
and where appropriate, borrowings.                                              
Contingent liabilities                                                          
Guarantees and suretyships                  18             18            18     
Environmental guarantees                   173            152           129     
191            170           147      
11. Subsequent events                                                           
Contingent liability                                                            
On 18 April 2008, Harmony Gold Mining Company Limited was made aware that it    
has been named or may be named as a defendant in a lawsuit filed in the U.S.    
District Court in the Southern District of New York on behalf of certain        
purchasers and sellers of Harmony`s American Depositary Receipts ("ADRs").      
Harmony has retained legal counsel, who will advise Harmony on further          
developments in the U.S.                                                        
Papua New Guinea (PNG) assets                                                   
On 22 April 2008, Harmony Gold Mining Company Limited ("Harmony") announced     
that they had signed an agreement with Newcrest Mining Limited ("Newcrest"),    
which allows Newcrest to earn a 50% interest in Harmony`s Papua New Guinea      
(PNG) gold assets. Newcrest will earn its 50% interest in the new joint venture 
by contributing a maximum of US$525 million.                                    
The commitment will be in two stages: (i) an initial US$180 million payment to  
acquire a 30.01% interest by 30 June 2008, together with a reimbursement to     
Harmony of US$45 million in project expenditure and (ii) a farm-in commitment   
for the remaining 19.99% of approximately US$300 million, to fund project       
expenditure up to the commencement of mining operations at Hidden Valley.       
A further announcement will be made on SENS and in the press as soon as the     
financial effects are finalised. Accordingly, Harmony shareholders are advised  
to exercise caution when trading in their securities until such time as a       
further announcement is made.                                                   
12. Segment report                                                              
The primary reporting format of the company is by business segment. As there is 
only one business segment, being mining, extraction and production of gold, the 
relevant disclosures have been given in the condensed consolidated financial    
statements.                                                                     
CONTACT DETAILS                                                                 
Harmony Gold Mining Company Limited                                             
Corporate Office                                                                
PO Box 2                                                                        
Randfontein, 1759                                                               
South Africa                                                                    
Corner Main Reef Road                                                           
and Ward Avenue                                                                 
Randfontein, 1759                                                               
Johannesburg                                                                    
South Africa                                                                    
Telephone:     +27 11 411 2000                                                  
Website: http://www.harmony.co.za                                               
Directors                                                                       
P T Motsepe (Chairman)*                                                         
G Briggs (Chief Executive Officer)                                              
F Abbott*, J A Chissano*^,                                                      
F T De Buck*, Dr D S Lushaba*                                                   
C Markus*, M Motloba*,                                                          
C M L Savage*, A J Wilkens*                                                     
Dr C Diarra*, K V Dicks*                                                        
(*non-executive)                                                                
(^Mozambique)                                                                   
Further Information                                                             
Amelia Soares                                                                   
General Manager, Investor Relations                                             
Telephone: +27 11 411 2314                                                      
Cell:      +27 (0) 82 654 9241                                                  
E-mail:    amelia.soares@harmony.co.za                                          
Marian van der Walt                                                             
Company Secretary                                                               
Telephone: +27 11 411 2037                                                      
Fax:       +27 11 411 2398                                                      
Cell:      +27 (0) 82 888 1242                                                  
E-mail:    marian.vanderwalt@harmony.co.za                                      
South African Share Transfer Secretaries                                        
Link Market Services South Africa (Proprietary) Limited                         
(Registration number 2000/007239/07)                                            
5th Floor, 11 Diagonal Street                                                   
Johannesburg, 2001                                                              
South Africa                                                                    
PO Box 4844                                                                     
Johannesburg, 2000                                                              
South Africa                                                                    
Telephone: +27 11 832 2652                                                      
Fax:       +27 11 834 4398                                                      
United Kingdom Registrars                                                       
Capita Registrars                                                               
The Registry                                                                    
34 Beckenham Road                                                               
Beckenham                                                                       
Kent BR3 4TU                                                                    
United Kingdom                                                                  
Telephone: +44 870 162 3100                                                     
Fax:       +44 208 639 2342                                                     
ADR Depositary                                                                  
The Bank of New York                                                            
101 Barclay Street                                                              
New York, NY 10286                                                              
United States of America                                                        
Telephone: +1888-BNY ADRS                                                       
Fax:       +1 212 571 3050                                                      
Date: 08/05/2008 08:00:16 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                             .                  
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information disseminated through SENS.                                          



                                        
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