Harmony Gold posts loss; strike continues

JOHANNESBURG – South Africa’s Harmony Gold posted a fourth-quarter headline loss per share of 102 cents yesterday, worse than expected, but said it would benefit in the current year from the completion of a restructuring plan.

The red ink, which followed a court-ordered delay in the company’s restructuring programme, marks Harmony’s eighth consecutive quarterly headline loss. Shares in the world’s sixth biggest gold producer were down 1,3 per cent at 53 rand following its results and on the second day of the first industry-wide strike by miners in 18 years to demand higher wages in the country that is the world’s biggest bullion producer.In May, a labour court blocked plans by Harmony to cut 5 000 jobs at loss-making mines due to procedural errors, and the firm had to restart the whole process.”We are at the end of our restructuring, which started 20-odd months ago,” Harmony Chief Executive Officer Bernard Swanepoel told a results briefing in Johannesburg.The restructuring will help Harmony restore operating health to its South African mines, he said.For the three months to end-June, Harmony was expected to narrow its headline loss to 66 cents per share from a loss of 107 cents in the previous quarter, according to the average forecast of eight analysts polled by Reuters.The forecasts for the headline loss per share, which strips out non-trading, capital and certain one-off items, were in a range of 7 to 98 cents.Harmony posted a 45 million rand operating profit for the fourth quarter, against a 55 million rand loss in the previous quarter, boosted by higher gold prices and a seven per cent decline in the rand against the dollar, the company said.The miners’ union said about 100 000 South African workers remained on strike for a second day.The strike started on Sunday at 1600 GMT.Swanepoel said there would be ongoing talks with the National Union of Mineworkers but that the industry could ill afford to raise wages.”I don’t think the industry can afford a strike but am absolutely convinced the industry cannot afford the wages increases,” he said.Swanepoel said the group planned capital expenditure of 1,552 billion rand for fiscal 2006.”This capital is earmarked for a range of existing and new Harmony projects that will rebuild our production profile to around four million ounces over the next four years and all at lower cash costs,” he said.Harmony said it lost 372 million rand on the sale of its stake in rival Gold Fields.Harmony abandoned a hostile bid for Gold Fields in May.Harmony Gold has been one of the mining firms worst hit by the buoyant rand, since ore at most of its mines generally contains less precious metal compared to its two major rivals.It also has diversified less overseas than rivals Gold Fields and AngloGold Ashanti, with 90 per cent of output coming from South African operations.-Nampa-ReutersShares in the world’s sixth biggest gold producer were down 1,3 per cent at 53 rand following its results and on the second day of the first industry-wide strike by miners in 18 years to demand higher wages in the country that is the world’s biggest bullion producer.In May, a labour court blocked plans by Harmony to cut 5 000 jobs at loss-making mines due to procedural errors, and the firm had to restart the whole process.”We are at the end of our restructuring, which started 20-odd months ago,” Harmony Chief Executive Officer Bernard Swanepoel told a results briefing in Johannesburg.The restructuring will help Harmony restore operating health to its South African mines, he said.For the three months to end-June, Harmony was expected to narrow its headline loss to 66 cents per share from a loss of 107 cents in the previous quarter, according to the average forecast of eight analysts polled by Reuters.The forecasts for the headline loss per share, which strips out non-trading, capital and certain one-off items, were in a range of 7 to 98 cents.Harmony posted a 45 million rand operating profit for the fourth quarter, against a 55 million rand loss in the previous quarter, boosted by higher gold prices and a seven per cent decline in the rand against the dollar, the company said.The miners’ union said about 100 000 South African workers remained on strike for a second day.The strike started on Sunday at 1600 GMT.Swanepoel said there would be ongoing talks with the National Union of Mineworkers but that the industry could ill afford to raise wages.”I don’t think the industry can afford a strike but am absolutely convinced the industry cannot afford the wages increases,” he said.Swanepoel said the group planned capital expenditure of 1,552 billion rand for fiscal 2006.”This capital is earmarked for a range of existing and new Harmony projects that will rebuild our production profile to around four million ounces over the next four years and all at lower cash costs,” he said.Harmony said it lost 372 million rand on the sale of its stake in rival Gold Fields.Harmony abandoned a hostile bid for Gold Fields in May.Harmony Gold has been one of the mining firms worst hit by the buoyant rand, since ore at most of its mines generally contains less precious metal compared to its two major rivals.It also has diversified less overseas than rivals Gold Fields and AngloGold Ashanti, with 90 per cent of output coming from South African operations.-Nampa-Reuters