Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
South Africa’s Harmony Gold said on Friday its earnings per share for the first half of the year could be up to 97 percent lower than this time last year.
The gold miner said a 915 million rand ($67 million) depreciation charge, lower derivatives gains and unfavourable currency conversion hit earnings, while costs also rose 6 percent.
Headline earnings per share – a key profit measure in South Africa that strips out one off items – were expected to be between 83 percent and 97 percent lower than the first half of 2018, Harmony said in a trading update.
However, Harmony said its production rose by 34 percent year-on-year, contributing to its operational free cash flow, thanks to its investments in two mines.
One, Hidden Valley, reached commercial levels of production in June 2018, prompting the larger depreciation and amortisation charge.
Harmony shares were up 1.24 percent to 29.36 rand per share at 0741 GMT. The miner will publish its half-year results on Feb. 12. ($1 = 13.6667 rand)
(Reporting by Emma Rumney Editing by James Macharia)
