Feb. 6 (Bloomberg) -- Harmony Gold Mining Co., Africa’s third-largest producer of the metal, rose the most in two months after profit more than doubled, beating analysts’ estimates.
Harmony jumped 3.7 percent to 96.50 rand at the close in Johannesburg, its biggest gain since Nov. 30. Earnings excluding one-time items rose to 1 billion rand ($130 million), or 2.42 rand a share, in the quarter through December, from 411 million rand, or 95 cents, in the prior three months, the Johannesburg- based company said in a statement today. The average estimate of five analysts surveyed by Bloomberg was for earnings of 1.54 rand a share.
The company sold gold at 438,183 rand a kilogram, up 11 percent, and cut operating costs 6 percent to 249,356 rand a kilogram. Production climbed 5 percent to 344,592 ounces in the quarter, from 328,162 ounces in the previous three months.
“That Harmony had a very high rand gold price in the quarter and was also able to bring costs down is a double whammy,” Ferdi Heyneke, a trader at Afrifocus Securities, said by telephone today. “If it can continue to contain costs it bodes well for Harmony’s outlook.”
Gold companies in South Africa, the continent’s largest producer of the metal, gain from a weaker rand as they sell much of their output for dollars and pay most costs in their local currency. Harmony and larger rivals AngloGold Ashanti Ltd. and Gold Fields Ltd. benefited from a 34 percent jump in the local price of gold in the year as the rand sank. Harmony gains most as it mines about 90 percent of its gold in South Africa.
Harmony cut its production target to 1.35 million ounces from 1.45 million ounces for the 2012 financial year ending June 30, Henrika Basterfield, a spokeswoman, said today.
The company had seven fatalities in the quarter. “The past quarter’s safety performance was very disappointing,” Harmony said in a statement.
Analysts who track South African gold producers measure quarter-on-quarter earnings excluding one-time items.
--Editors: Tony Barrett, Randall Hackley
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