HARMONY
Incorporated in the Republic of South Africa
Registration Number 1950/038232/06
("Harmony" or "Company")
JSE Share code: HAR
NYSE Share code: HMY
ISIN Code: ZAE 000015228
Results for the first quarter ended 30 September 2009
Key features for the quarter
- 6% increase in total gold production higher than guidance provided
- 6% increase in underground tonnage
- 10% improvement in average recovery grade
- 5.2% increase in total R/kg costs
- mainly related to wages and electricity increases
- Capital efficiencies
- capital expenditure 17% less than previous quarter
- On track to delivering annual production target
- increased ounces
- improved performance at all shafts except Virginia and Evander
Financial summary for the first quarter ended 30 September 2009
Quarter Quarter
Sept June Q-on-Q
2009 2009 % variance
Gold produced kg 11 615 11 003 5.6
Gold produced oz 373 431 353 752 5.6
Cash costs R/kg 188 362 179 074 (5.2)
Cash costs US$/oz 753 661 (13.9)
Cash operating profit R million 552 743 (25.7)
Cash operating profit US$ million 71 88 (19.3)
Gold sold kg 11 471 10 829 5.9
Gold sold oz 368 800 348 160 5.9
Gold price R/kg 239 438 245 953 (2.69)
Exchange rate R/US$ 7.78 8.42 (7.6)
HARMONY'S ANNUAL REPORTS
Harmony's Annual Report, Notice of Annual General Meeting, its Sustainable
Development Report and its annual report filed on a Form 20F with the United
States' Securities and Exchange Commission for the year ended 30 June 2009 are
available on our website at www.harmony.co.za.
Chief Executive Officer's Review
Overview
The first quarter of FY10 marked the start of our `Four-phase Growth Path', the
objective of which is to produce more ounces from those assets we have and to
acquire further ounces through acquisitions and strategic partnerships.
Safety
We are deeply saddened by the death of eight of our colleagues during the
quarter and I extend my hearfelt condolences to their families, friends and
workmates.
Those who died were: Phakisa employee Tokelo Maliba, a loader driver; Masimong
employee Letsema Hlaeli, a team leader; Unisel employees Simiao Alexandre Bila,
a miner, Thabiso Belekwane and Tseliso Lekeka, both locomotive operators;
Evander employee Boy Sikobi, a rock drill operator; Elandsrand employee Samual
Tsabedze, a stope team leader; and Doornkop employee Clement Rantjelebane, an
engineering foreman.
Safety concerns are being addressed through: management leading by example,
improved communication and safety awareness campaigns. Our safety strategy and
initiatives have resulted in improved safety statistics quarter-on-quarter, but
we continue to strive for an even safer working environment.
Gold market
Primarily a South African gold producer, we continued to experience the
negative impact of a strong South African Rand, and a consequent lower average
Rand gold price received, on revenue. In the quarter under review, the Rand/US
Dollar exchange rate averaged R7.78/US$ compared with R8.42/US$ in the previous
quarter. The average Rand gold price received during the period declined by 3%
to R239 438/kg.
It is encouraging, nonetheless, to note the 7% improvement in the US Dollar
gold price from US$935/oz at the start of the quarter to US$996/oz at the
close. This serves to underpin our confidence in gold, particularly during
times of global economic stress.
None of the fundamentals supporting the metal have changed: overall demand is
little affected by increased scrap entering the market; central banks continue
to exercise prudence in respect of their holdings; and supply of newly-mined
gold is likely to continue to be constrained by fewer new discoveries, as well
as the costs and timeframes associated with exploration, development and
mining, and by the availability of funding for new projects.
Operational performance
Total gold production increased by 6% to 11 615kg, reflecting increases in gold
production from both underground and surface sources and exceeding guidance
provided in September 2009. While total throughput was 4% lower at 4 484 000t,
the average yield was 10% higher at 2.59g/t.
Underground gold production was 5% higher at 10 724kg, resulting from a 6% rise
in throughput from underground to 2 392 000t. The average underground yield was
slightly lower at 4.48g/t. With the exception of Evander and Virginia, all of
the underground operations delivered improvements in gold production.
Particularly noteworthy was Doornkop's 28% increase in gold production. This
was the consequence of a 45% increase in yield, due largely to a remarkable
improvement in development metres achieved, which will ensure that the build-up
plan on the South Reef Project is achieved.
A 26% increase in surface yield to 0.43g/t more than offset the impact of a 13%
decrease in surface throughput, resulting in a 10% increase in surface gold
production to 891kg. The Kalgold open-pit operation recorded a 16% increase in
gold production on the back of higher throughput due to improved plant
availability, while the surface retreatment operations, excluding Phoenix,
showed a 61% improvement in yield and delivered 14% more gold.
Financial performance
Higher gold production helped to overcome the negative impact of a 3% drop in
the average Rand gold price received to R239 438/kg. Consequently, total
revenue was 3% higher at R2.7 billion. After accounting for an 11% increase in
cash operating costs to R2.2 billion the main drivers of which were
electricity and labour cash operating profit was 26% down on the previous
quarter at R552 million.
Labour costs increased by R162 million when compared to the previous quarter,
due to annual wage increases implemented and a once off leave liability
adjustment of R35 million. Electricity costs increased by R135 million, R75
million of which was attributable to winter tariffs.
As previously advised, capital expenditure is beginning to edge downward as the
major projects reach advanced stages of development and start to come on
stream. The September quarter's capital expenditure was 17% down at R915
million.
Project progress
Our South African growth projects, Phakisa, Doornkop, Elandsrand and the
Tshepong decline are working towards contributing lower cost per unit ounces.
These projects are well on their way towards achieving their targets.
Despite some setbacks during the commissioning phase, good progress was made at
Hidden Valley in Papua New Guinea. Completion and commissioning of the conveyor
is scheduled during the December 2009 quarter, with production expected to ramp
up to commercial levels during the December 2009 quarter.
Exploration
Generally, exploration results were pleasing and the drilling programmes are on
track.
Investor Day
On 19 August 2009 Harmony held an Investor Day, the purpose of which was to
share with investors our planning parameters, strategic plan and outlook for
the next five years. We have spent R1.1 billion on capital development in the
past year, which is already showing results.
Corporate matters
It is pleasing to report that all agreements relating to our acquisition of the
Free State assets from Pamodzi Gold Free State (Pty) Limited (in provisional
liquidation) (Pamodzi Gold Free State) have been signed, following indications
of support from the main creditors being the Industrial Development Corporation
and the Unions, and the sanction of the High Court.
The waste rock dump agreement became unconditional on 16 September 2009 and R20
million in terms of this agreement was paid to Pamodzi Gold Free State. It is
likely that the remaining agreements will become unconditional towards the end
of November 2009, which will result in Harmony having to pay the balance of the
consideration price, being R380 million.
The assets, to be known collectively for now as the President Steyn Shafts, are
an excellent fit with our existing Free State assets. As reported previously,
we expect to be able to exploit numerous synergies between the two, and to
deliver significant profitable ounces into our growth profile as a result.
Harmony paid its first dividend in five years on 21 September 2009. We believe
that paying a dividend is a sign of a healthy company and, depending on
operational performance and revenue, we intend paying regular dividends to
shareholders.
Looking ahead
In the short term, we would expect gold production to increase marginally as
the various restructuring measures we have taken in respect of existing
operations continue to bed down and as our new projects start to deliver.
We will have to contend with the likelihood of continuing Rand strength for
now, and the negative consequences of this on Rand gold receipts. Indeed, we
may have to consider some restructuring at our lowest- grade, highest-cost
operations.
In terms of costs, while we are into summer and free for a couple of quarters
from higher winter electricity tariffs, the spectre of further extraordinary
price hikes from power utility Eskom to fund its growth imperative looms large.
In addition, our wage bill will reflect the impact of the recently agreed
two-year wage settlement.
Our weapon in managing the strong Rand and rising costs, must be improved
productivity in short, we need to work harder and smarter. Our focus remains
producing more profitable ounces.
Looking further ahead, we remain bullish on the fundamentals of the gold sector
in the medium and longer term. This is what encourages us to continue to pursue
our four-phase growth path:
- optimising our asset portfolio;
- improving operational efficiency and productivity;
- making further acquisitions and entering into other strategic partnerships
when it makes sense to do so; and
- growing organically.
Chief Executive Officer
Graham Briggs
Safety and health
Safety
Safety remains a key focus at all of Harmony's operations. It is with deep
regret that we report that eight fatalities occurred during the September 2009
quarter. Falls of ground were the main cause of most of these incidents. Our
management teams continue to roll out effective behavior-based safety
programmes to ensure that safety standards are adhered to and that best
practices are applied at all workplaces.
We are pleased to announce that, during the September quarter, there was an
improvement in the key safety rates compared to the previous quarter. The Lost
Time Injury Frequency Rate (LTIFR) improved by 26% compared to the actual
figure for the previous year (from 9.35 to 6.91) and by 17% quarter-on-quarter
from 8.35 to 6.91, the best rate ever achieved at Harmony. A single-digit LTIFR
was achieved for the fourth consecutive quarter. The year to date Reportable
Injury Frequency Rate (RIFR) improved by 29% compared to the actual figure for
the previous year (from 4.97 to 3.55) and by 20% from 4.43 in the June 2009
quarter to 3.55 in the current quarter; again, the best ever achieved RIFR at
Harmony. Although the Fatality Injury Frequency Rate (FIFR) declined 52%
compared to the actual figure for the previous year (from 0.21 to 0.32), an
improvement of 9% was achieved for the quarter under review at 0.32 compared
with a FIFR of 0.35 in the previous quarter. These improvements in safety rates
bear testimony to the emphasis placed on safety at Harmony and we are starting
to see the positive effects of behaviour change among our employees.
Harmony's management team is dedicated to ensuring that these safety
improvements are sustainable and to ensure that through the continued
implementation of effective behaviour-based safety programmemes at all our
operations, the safety culture and mindset of safety is maintained throughout
the company.
The following operations achieved outstanding safety results:
- Evander 8 Shaft 2 000 000 fatality free shifts
- Doornkop Shaft 1 000 000 fatality free shifts
- Merriespruit 1 Shaft 750 000 fatality free shifts
- Evander Plant 500 000 fatality free shifts
Health
The well-being and healthcare of our employees is another key focus for the
company. Harmony continues to consolidate the various components of healthcare
that will contribute to the well-being of our employees and improve
productivity in the company in the longer term.
In terms of occupational hygiene, noise and dust are the key problem areas.
Much is being done to curb the impact of these and ensure that our employees
are protected against them in their workplaces. During the quarter under
review, implementation of personalised hearing protection devices (HPDs) was
90% completed. The installation of sound attenuators on mechanical loaders has
been scheduled and some of the operations have already begun installation of
the devices.
CONDENSED CONSOLIDATED INCOME STATEMENT (Rand)
Quarter ended
September June
2009 2009
(Unaudited) (Unaudited)
Note R million R million
Continuing operations
Revenue 2 747 2 663
Cost of sales 2 (2 604) (2 863)
Production cost (2 195) (1 920)
Amortisation and depreciation (350) (546)
Impairment of assets (330)
Employment termination and
restructuring costs
Other items (59) (67)
Gross profit/(loss) 143 (200)
Corporate, administration and other
expenditure (88) (99)
Exploration expenditure (60) (77)
Other (expenses)/income net (72) (74)
Operating (loss)/profit (77) (450)
Profit from associates 31 49
Profit on sale of investment in associate
Impairment of investment in associate
Fair value movement of listed
investments 12
Profit on sale of listed investments 2
Impairment of investments (2)
Investment income 71 108
Finance cost (35) (20)
(Loss)/profit before taxation (10) (301)
Taxation (19) 547
Net (loss)/profit from continuing
operations (29) 246
Discontinued operations 3
(Loss)/profit from discontinued
operations (8)
Net (loss)/profit (29) 238
(Loss)/earnings per ordinary share
(cents) 4
(Loss)/earnings from continuing
operations (7) 58
(Loss)/earnings from discontinued
operations (2)
Total (loss)/earnings per ordinary
share (cents) (7) 56
Diluted (loss)/earnings per ordinary
share (cents) 4
(Loss)/earnings from continuing
operations (7) 58
(Loss)/earnings for discontinued
operations (2)
Total diluted (loss)/earnings per
ordinary share (cents) (7) 56
Year ended
September1 June
2008 2009
(Unaudited) (Audited)
R million R million
Continuing operations
Revenue 2 682 11 496
Cost of sales (2 377) (9 836)
Production cost (1 874) (7 657)
Amortisation and depreciation (308) (1 467)
Impairment of assets (152) (484)
Employment termination and restructuring costs (12) (39)
Other items (31) (189)
Gross profit/(loss) 305 1 660
Corporate, administration and other expenditure (91) (362)
Exploration expenditure (51) (289)
Other (expenses)/income net 524 864
Operating (loss)/profit 687 1 873
Profit from associates 1 12
Profit on sale of investment in associate 1 1
Impairment of investment in associate (112) (112)
Fair value movement of listed investments (101)
Profit on sale of listed investments
Impairment of investments
Investment income 77 444
Finance cost (85) (212)
(Loss)/profit before taxation 569 1 905
Taxation (237) (196)
Net (loss)/profit from continuing operations 332 1 709
Discontinued operations
(Loss)/profit from discontinued operations 70 1 218
Net (loss)/profit 402 2 927
(Loss)/earnings per ordinary share (cents)
(Loss)/earnings from continuing operations 83 413
(Loss)/earnings from discontinued operations 17 294
Total (loss)/earnings per ordinary share (cents) 100 707
Diluted (loss)/earnings per ordinary share
(cents)
(Loss)/earnings from continuing operations 82 411
(Loss)/earnings for discontinued operations 17 293
Total diluted (loss)/earnings per ordinary share
(cents) 99 704
The accompanying notes are an integral part of these condensed consolidated
financials statements.
1 The comparative figures are re-presented due to Mount Magnet being
reclassified as part of continuing operations. See note 3 in this regard.
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME (Rand)
Quarter ended
September June
2009 2009
(Unaudited) (Unaudited)
R million R million
Net (loss)/profit for the period (29) 238
Attributable to:
Owners of the parent (29) 238
Non-controlling interest
Other comprehensive income/(loss) for the
period, net of income tax 15 (203)
Foreign exchange translation profit/(loss) 19 (205)
Mark-to-market of available-for-sale
investments (4) 2
Total comprehensive (loss)/income for the
period (14) 35
Attributable to:
Owners of the parent (14) 35
Non-controlling interest
Year ended
September June
2008 2009
(Unaudited) (Audited)
R million R million
Net (loss)/profit for the period 402 2 927
Attributable to:
Owners of the parent 402 2 927
Non-controlling interest
Other comprehensive income/(loss) for the
period, net of income tax 88 (450)
Foreign exchange translation profit/(loss) 119 (497)
Mark-to-market of available-for-sale
investments (31) 47
Total comprehensive (loss)/income for the
period 490 2 477
Attributable to:
Owners of the parent 490 2 477
Non-controlling interest
CONDENSED CONSOLIDATED BALANCE SHEET (Rand)
At
September
2009
(Unaudited)
Note R million
ASSETS
Non-current assets
Property, plant and equipment 28 457
Intangible assets 2 218
Restricted cash 165
Restricted investments 1 668
Investments in financial assets 39
Investments in associates 360
Trade and other receivables 72
32 979
Current assets
Inventories 1 147
Trade and other receivables 838
Income and mining taxes 45
Cash and cash equivalents 1 094
3 124
Assets of disposal groups classified as
held-for-sale 3
3 124
Total assets 36 103
EQUITY AND LIABILITIES
Share capital and reserves
Share capital 28 093
Other reserves 388
Retained earnings/(accumulated loss) 853
29 334
Non-current liabilities
Borrowings 5 108
Deferred tax 3 265
Provision for environmental rehabilitation 1 564
Retirement benefit obligation and other
provisions 166
5 103
Current liabilities
Trade and other payables 1 385
Income and mining taxes 21
Borrowings 5 260
1 666
Liabilities of disposal groups classified as
held-for-sale
1 666
Total equity and liabilities 36 103
Number of ordinary shares in issue 426 024 653
Net asset value per share (cents) 6 886
At At
June September
2009 2008
(Audited) (Unaudited)
R million R million
ASSETS
Non-current assets
Property, plant and equipment 27 912 27 020
Intangible assets 2 224 2 213
Restricted cash 161 181
Restricted investments 1 640 1 512
Investments in financial assets 57 48
Investments in associates 329 34
Trade and other receivables 75 127
32 398 31 135
Current assets
Inventories 1 035 752
Trade and other receivables 885 875
Income and mining taxes 45 54
Cash and cash equivalents 1 950 1 186
3 915 2 867
Assets of disposal groups classified as
held-for-sale 1 408
3 915 4 275
Total assets 36 313 35 410
EQUITY AND LIABILITIES
Share capital and reserves
Share capital 28 091 25 904
Other reserves 339 777
Retained earnings/(accumulated loss) 1 095 (1 430)
29 525 25 251
Non-current liabilities
Borrowings 110 176
Deferred tax 3 251 3 008
Provision for environmental rehabilitation 1 530 1 152
Retirement benefit obligation and other
provisions 166 145
5 057 4 481
Current liabilities
Trade and other payables 1 460 1 528
Income and mining taxes 19 295
Borrowings 252 3 363
1 731 5 186
Liabilities of disposal groups classified as
held-for-sale 492
1 731 5 678
Total equity and liabilities 36 313 35 410
Number of ordinary shares in issue 425 986 836 403 424 148
Net asset value per share (cents) 6 931 6 259
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
Note R million R million
Balance 30 June 2009 28 091 339
Issue of share capital 2
Deferred share-based payments 34
Comprehensive income/(loss) for the period 15
Dividends paid 6
Balance as at 30 September 2009 28 093 388
Balance 30 June 2008 25 895 676
Issue of share capital 9
Deferred share-based payments 13
Comprehensive income for the period 88
Balance as at 30 September 2008 25 904 777
Retained
earnings/
(accumulated
loss) Total
R million R million
Balance 30 June 2009 1 095 29 525
Issue of share capital 2
Deferred share-based payments 34
Comprehensive income/(loss) for the period (29) (14)
Dividends paid (213) (213)
Balance as at 30 September 2009 853 29 334
Balance 30 June 2008 (1 832) 24 739
Issue of share capital 9
Deferred share-based payments 13
Comprehensive income for the period 402 490
Balance as at 30 September 2008 (1 430) 25 251
CONDENSED CONSOLIDATED CASH FLOW STATEMENT (Rand)
Quarter ended
September June
2009 2009
(Unaudited) (Unaudited)
R million R million
Cash flow from operating activities
Cash generated by operations 225 780
Interest and dividends received 68 107
Interest paid (9) (65)
Income and mining taxes paid (25) (428)
Cash generated by operating activities 259 394
Cash flow from investing activities
(Increase)/decrease in restricted cash (3) 6
Net proceeds on disposal of listed investments 15
Net additions to property, plant and equipment (907) 1 093
Other investing activities 8 51
Cash (utilised)/generated by investing
activities (887) 1 150
Cash flow from financing activities
Long-term loans repaid (7) (2 462)
Ordinary shares issued net of expenses 2 10
Dividends paid (213)
Cash utilised by financing activities (218) (2 452)
Foreign currency translation adjustments (10) 18
Net (decrease)/increase in cash and cash
equivalents (856) (890)
Cash and cash equivalents beginning of
period 1 950 2 840
Cash and cash equivalents end of period 1 094 1 950
Year ended
September June
2008 2009
(Unaudited) (Audited)
R million R million
Cash flow from operating activities
Cash generated by operations 670 2 813
Interest and dividends received 82 457
Interest paid (112) (280)
Income and mining taxes paid (1) (704)
Cash generated by operating activities 639 2 286
Cash flow from investing activities
(Increase)/decrease in restricted cash (103) (83)
Net proceeds on disposal of listed investments
Net additions to property, plant and equipment 798 979
Other investing activities 10 (79)
Cash (utilised)/generated by investing
activities 705 817
Cash flow from financing activities
Long-term loans repaid (588) (3 738)
Ordinary shares issued net of expenses 8 1 953
Dividends paid
Cash utilised by financing activities (580) (1 785)
Foreign currency translation adjustments 7 217
Net (decrease)/increase in cash and cash
equivalents 770 1 535
Cash and cash equivalents beginning of
period 415 415
Cash and cash equivalents end of period 1 186 1 950
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2009
1. Accounting policies
Basis of accounting
The condensed consolidated interim financial statements for the period ended 30
September 2009 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 2009. 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 2009.
2. Cost of sales
Quarter ended
September June
2009 2009
(Unaudited) (Unaudited)
R million R million
Production costs 2 195 1 920
Amortisation and depreciation 350 546
Impairment of assets 330
Provision for rehabilitation costs 4 13
Care and maintenance cost of restructured
shafts 21 15
Employment termination and restructuring costs
Share-based compensation 34 38
Provision for post retirement benefits 1
Total cost of sales 2 604 2 863
Year ended
September1 June
2008 2009
(Unaudited) (Audited)
R million R million
Production costs 1 874 7 657
Amortisation and depreciation 308 1 467
Impairment of assets 152 484
Provision for rehabilitation costs 6 21
Care and maintenance cost of restructured shafts 12 53
Employment termination and restructuring costs 12 39
Share-based compensation 13 113
Provision for post retirement benefits 2
Total cost of sales 2 377 9 836
1 The comparative figures are re-presented due to Mount Magnet being
reclassified as part of continuing operations. See note 3 in this regard.
3. Disposal groups classified as held-for-sale and discontinued operations
Following approval by the Board of Directors in April 2007, the assets and
liabilities related to Mount Magnet (operations in Australia) were classified
as held-for-sale. This operation also met the criteria to be classified as
discontinued operations in terms of IFRS 5. During the June 2009 quarter, it
was decided that further drilling at the site to define the orebody would
enhance the selling potential of the operation. As a result, the operation no
longer met the requirements of IFRS 5 to be classified as held-for-sale, and
was therefore reclassified as continuing operations again. Consequently, the
income statements and earnings per share amounts for all comparative periods
have been represented taking this change into account.
4. (Loss)/earnings per ordinary share
(Loss)/earnings per ordinary share is calculated on the weighted average number
of ordinary shares in issue for the quarter ended 30 September 2009: 425.9
million (30 June 2009: 425.7 million, 30 September 2008: 403.1 million) and for
the year ended 30 June 2009: 414.1 million.
The fully diluted (loss)/earnings per ordinary share is calculated on weighted
average number of diluted ordinary shares in issue for the quarter ended 30
September 2009: 427.2 million (30 June 2009: 427.5 million, 30 September 2008:
404.6 million) and for the year ended 30 June 2009: 416.0 million.
Quarter ended
September June
2009 2009
(Unaudited) (Unaudited)
Total (loss)/earnings per ordinary share (cents):
Basic (loss)/earnings (7) 56
Fully diluted (loss)/earnings (7) 56
Headline (loss)/earnings (12) 107
from continuing operations (12) 107
from discontinued operations
R million R million
Reconciliation of headline (loss)/earnings:
Continuing operations
Net (loss)/profit (29) 246
Adjusted for (net of tax):
Profit on sale of property, plant and equipment (1) (83)
Profit on sale of listed investments (1)
Fair value movement of listed investments (9)
Foreign exchange gain reclassified from equity (22)
Profit on sale of associate
Impairment of investment in associates
Impairment of investments 2
Impairment of property, plant and equipment 303
Headline (loss)/earnings (51) 457
Discontinued operations
Net (loss)/profit (8)
Adjusted for (net of tax):
Profit/(loss) on sale of property,
plant and equipment 6
Headline (loss)/earnings (2)
Total headline (loss)/earnings (51) 455
Year ended
September June
2008 2009
(Unaudited) (Audited)
Total (loss)/earnings per ordinary share
(cents):
Basic (loss)/earnings 100 707
Fully diluted (loss)/earnings 99 704
Headline (loss)/earnings 24 262
from continuing operations 7 239
from discontinued operations 17 23
R million R million
Reconciliation of headline (loss)/earnings:
Continuing operations
Net (loss)/profit 332 1 709
Adjusted for (net of tax):
Profit on sale of property, plant and equipment (567) (975)
Profit on sale of listed investments
Fair value movement of listed investments 71
Foreign exchange gain reclassified from equity (384)
Profit on sale of associate (1) (1)
Impairment of investment in associates 112 112
Impairment of investments
Impairment of property, plant and equipment 152 457
Headline (loss)/earnings 28 989
Discontinued operations
Net (loss)/profit 70 1 218
Adjusted for (net of tax):
Profit/(loss) on sale of property,
plant and equipment (1 121)
Headline (loss)/earnings 70 97
Total headline (loss)/earnings 98 1 086
5. Borrowings
September June September
2009 2009 2008
(Unaudited) (Audited) (Unaudited)
R million R million R million
Total long-term borrowings 108 110 176
Total current portion of
borrowings 260 252 3 363
Total borrowings(1) 368 362 3 539
(1) Included in the borrowings is R104 million (June 2009: R106 million;
September 2008: R183 million) owed to Westpac Bank Limited in terms of a
finance lease agreement. The future minimum lease payments to the loan are as
follows:
September June September
2009 2009 2008
(Unaudited) (Audited) (Unaudited)
R million R million R million
Due within one year 31 30 46
Due between one and five years 76 80 156
107 110 202
Future finance charges (3) (4) (19)
Total future minimum lease
payments 104 106 183
6. Dividend declared
On 13 August 2009, the board of directors approved a final dividend for the
2009 financial year of 50 SA cents per share. The total dividend, amounting to
R213 million was paid on 21 September 2009.
September June September
2009 2009 2008
(Unaudited) (Audited) (Unaudited)
Dividend declared (R million) 213
Number of shares in issue
(thousands) 426 025 425 987 403 424
Dividend per share (cents) 50
7. Commitments and contingencies
September June September
2009 2009 2008
(Unaudited) (Audited) (Unaudited)
R million R million R million
Capital expenditure commitments
Contracts for capital expenditure 528 478 512
Authorised by the directors but
not contracted for 1 829 734 2 467
2 357 1 212 2 979
This expenditure will be financed from existing resources.
Contingent liability
Class action
We have filed with the Court a Motion to Dismiss all claims asserted in the
Class Action Case, the plaintiffs have filed an opposing response, and we have
since replied to that response. At this point the matter is in the hands of the
Court and we are awaiting a ruling by the Court. It is not possible to predict
with certainty when the Court will rule on the Motion to Dismiss as the timing
of the ruling is entirely within the discretion of the Court.
8. Subsequent events
During October 2009, Harmony sold its remaining Avoca shares of 2 465 295 at an
average price of A$1.66 per share, amounting to the sale proceeds of A$4.1
million.
9. Segment report
The segment report follows below.
10. Reconciliation of segment information to consolidated income statements and
balance sheet
September September
2009 2008
(Unaudited) (Unaudited)
R million R million
The "reconciliation of segment data to
consolidated financials" line item
in the segment reports are broken down in the
following elements,
to give a better understanding of the
differences between the income
statement, balance sheet and segment report.
Revenue from:
Discontinued operations 338
Production costs from:
Discontinued operations 248
Reconciliation of cash operating profit to
gross profit:
Total segment revenue 2 747 3 020
Total segment production costs (2 195) (2 122)
Cash operating profit as per segment report 552 898
Less: Discontinued operations (90)
Cash operating profit as per segment report 552 808
Cost of sales items other than production costs (409) (503)
Amortisation and depreciation (350) (308)
Impairment of assets (152)
Employment termination and restructuring costs (12)
Share-based compensation (34) (13)
Rehabilitation costs (4) (6)
Care and maintenance costs of restructured
shafts (21) (12)
Gross profit as per income statements* 143 305
Reconciliation of total segment mining assets
to consolidated property, plant and equipment:
Property, plant and equipment not allocated to
a segment:
Mining assets 596 459
Undeveloped property 5 139 5 139
Other non-mining assets 66 48
Less: Non-current assets previously classified
as held-for-sale (272)
Less: Non-current assets classified as
held-for-sale (737)
5 801 4 637
* The reconciliation was done up to the first recognisable line item on the
income statement. The reconciliation will follow the income statement after
that.
SEGMENT REPORT FOR THE PERIOD ENDED 30 SEPTEMBER 2009 (Unaudited) (Rand/Metric)
Cash
Production operating Mining
Revenue cost profit/(loss) assets
R million R million R million R million
Operations
South Africa
Underground
Bambanani 234 193 41 672
Doornkop 120 101 19 2 618
Elandsrand 350 281 69 2 797
Evander 290 273 17 958
Masimong 324 186 138 684
Phakisa 64 59 5 3 778
Target 219 160 59 2 262
Tshepong 421 294 127 3 660
Virginia 398 413 (15) 868
Other (1) 128 105 23 230
Surface
Other (2) 199 130 69 141
Total South Africa 2 747 2 195 552 18 668
International
Papua New Guinea 3 713
Other operations
(3) 275
Total international 3 988
Total operations 2 747 2 195 552 22 656
Reconciliation of
the segment
information to the
consolidated
income statement
and balance sheet
(refer to note 10) 5 801
2 747 2 195 28 457
Capital Kilograms Tonnes
expenditure produced milled
R million kg t'000
Operations
South Africa
Underground
Bambanani 23 946 147
Doornkop 73 500 130
Elandsrand 111 1 625 260
Evander 52 1 239 259
Masimong 39 1 359 234
Phakisa 128 260 71
Target 84 909 193
Tshepong 71 1 703 418
Virginia 52 1 668 544
Other (1) 18 515 136
Surface
Other (2) 15 891 2 092
Total South Africa 666 11 615 4 484
International
Papua New Guinea 249
Other operations (3)
Total international 249
Total operations 915 11 615 4 484
Reconciliation of the segment
information to the consolidated
income statement and
balance sheet (refer to note 10)
Notes:
(1) Includes Joel.
(2) Includes Kalgold, Phoenix and Dumps.
(3) Includes Mount Magnet.
SEGMENT REPORT FOR THE PERIOD ENDED 30 SEPTEMBER 2008 (Unaudited) (Rand/Metric)
Cash
Production operating Mining
Revenue cost profit/(loss) assets
R million R million R million R million
Continuing
operations
South Africa
Underground
Bambanani 256 171 85 731
Doornkop 55 59 (4) 2 229
Elandsrand 332 245 87 2 450
Evander 346 238 108 1 226
Masimong 282 169 113 647
Phakisa 23 18 5 3 265
Target 127 118 9 2 259
Tshepong 410 250 160 3 586
Virginia 485 377 108 928
Other (1) 114 92 22 233
Surface
Other (2) 252 137 115 151
Total South Africa 2 682 1 874 808 17 705
International
Papua New Guinea 3 669
Other operations (3) 272
Total international 3 941
Total continuing
operations 2 682 1 874 808 21 646
Discontinued
operations
Cooke operations 338 248 90 737
Total discontinued
operations 338 248 90 737
Total operations 3 020 2 122 898 22 383
Reconciliation of
the segment
information to the
consolidated
income statement
and balance sheet
(refer to note 10) (338) (248) 4 637
2 682 1 874 27 020
Capital Kilograms Tonnes
expenditure produced milled
R million kg t'000
Continuing operations
South Africa
Underground
Bambanani 11 1 189 142
Doornkop 3 255 110
Elandsrand 95 1 528 288
Evander 50 1 612 306
Masimong 33 1 272 235
Phakisa 105 109 30
Target 61 530 167
Tshepong 51 1 906 354
Virginia 39 2 197 568
Other (1) 11 538 137
Surface
Other (2) 54 1 151 2 262
Total South Africa 593 12 287 4 599
International
Papua New Guinea 400
Other operations (3)
Total international 400
Total continuing operations 993 12 287 4 599
Discontinued operations
Cooke operations 53 1 564 801
Total discontinued operations 53 1 564 801
Total operations 1 046 13 851 5 400
Reconciliation of the segment
information to the consolidated
income statement and
balance sheet (refer to note 10)
Notes:
(1) Includes Joel.
(2) Includes Kalgold, Phoenix and Dumps.
(3) Includes Mount Magnet.
CONTACT DETAILS
HARMONY GOLD MINING COMPANY LIMITED
Corporate Office
Randfontein Office Park
PO Box 2
Randfontein, 1760
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 (Interim Financial Director)
J A Chissano*1
F F T De Buck*, Dr C Diarra*+,
K V Dicks*, Dr D S Lushaba*, C Markus*,
M Motloba*, C M L Savage*, A J Wilkens*
(* non-executive)
(1 Mocambican)
(+ US/Mali Citizen)
Investor Relations Team
Esha Brijmohan
Investor Relations Officer
Telephone : +27 11 411 2314
Fax : +27 11 692 3879
Mobile : +27 82 759 1775
E-mail : esha@harmony.co.za
Marian van der Walt
Executive: Corporate and Investor Relations
Telephone : +27 11 411 2037
Fax : +27 86 614 0999
Mobile : +27 82 888 1242
E-mail : marian@harmony.co.za
Company Secretary
Khanya Maluleke
Telephone : +27 11 411 2019
Fax : +27 11 411 2070
Mobile : +27 82 767 1082
E-mail : Khanya.maluleke@harmony.co.za
South African Share Transfer Secretaries
Link Market Services South Africa (Proprietary) Limited
(Registration number 2000/007239/07)
16th Floor, 11 Diagonal Street
Johannesburg, 2001
PO Box 4844
Johannesburg, 2000
South Africa
Telephone : +27 86 154 6572
Fax : +27 86 674 3260
United Kingdom Registrars
Capita Registrars
The Registry
34 Beckenham Road
Bechenham
Kent BR3 4TU
United Kingdom
Telephone : +44 870 162 3100
Fax : +44 208 636 2342
ADR Depositary
The Bank of New York Mellon Inc
101 Barclay Street
New York, NY 10286
United States of America
Telephone : +1888-BNY-ADRS
Fax : +1 212 571 3050
Sponsor
JP Morgan Equities Limited
1 Fricker Road, corner Hurlingham Road
Illovo, Johannesburg, 2196
Private Bag X9936, Sandton, 2146
Telephone : +27 11 507 0300
Fax : +27 11 507 0503
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
Registration number 1950/038232/06
Incorporated in the Republic of South Africa
ISIN: ZAE 000015228