“Harmony Gold Mining Co. (HAR), Africa’s third-largest producer, said profit rose 28 percent as costs dropped and prices received for the metal climbed even as its biggest operation was shut due to strikes. The stock rallied.
Earnings excluding one-time items advanced to 680 million rand ($77 million), or 1.58 rand a share, in the quarter through December from 529 million rand, or 1.23 rand a share, 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 1.05 rand a share.
Gold output dropped 9 percent in the December quarter from the previous three months because of work stoppages and violence at Harmony’s Kusasalethu mine, its largest. The operation, which is in Carletonville, South Africa, has been shut since then for safety, and Harmony has until March 7 to complete a review with unions that may lead to the mine’s closure.
“It’s very difficult not to agree to law and order and safety no matter what side of the fence you are on,” Chief Executive Officer Graham Briggs said on a call today. The agreement Harmony and labor unions are working on should allow for “lasting and sustainable engagement,” he said.
Harmony rallied 6.5 percent, the most on an intraday basis since Nov. 7, to 61.10 rand by 9:27 a.m. in Johannesburg….”
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