NZINGA QUNTA: Harmony Gold profit has taken a tumble [in the year to end June].
Boipelo Lekubo, who’s the monetary director, joins me now. Thanks a lot to your time this night. A 2% improve in income – Boipelo, simply speak to me about what occurred there.
BOIPELO LEKUBO: Thanks Nzinga, and good night to your viewers. Just on the rise in income, clearly our manufacturing was barely down, so we have been aided by the gold worth. I believe that additionally features a acquire from our hedging programme, which was slightly below R500 million included in income. The gold worth we obtained was 5% up 12 months on 12 months, in order that led to the two% improve that you simply noticed on total income.
NZINGA QUNTA: It appears like fairly a difficult 12 months. Just speak to me via the challenges that you simply confronted as Harmony Gold relating to these outcomes and the lower, maybe, in underground restoration, lower in gold manufacturing, and in complete mineral assets and reserves.
BOIPELO LEKUBO: I believe what we skilled within the first half of the 12 months was actually two months of misplaced manufacturing from our Hidden Valley mine in Papua New Guinea. That was actually simply on the again of belt failure, as properly as geotechnical points that we had there. For two months there was no manufacturing coming from there, which had a huge effect by way of the kilogrammes that we did produce.
Overall by way of grade, as properly, that got here roughly in line. We have been 3% down, coming in at 5.37g/tonne, as against the 5.51g/tonne that we had final 12 months.
So I believe simply by way of the general outcomes as properly, we did recognise an impairment, the majority of which was on the again of the restructuring of our Tshepong operation. That additionally had an affect on the general outcomes, ensuing within the adverse earnings that we noticed.
NZINGA QUNTA: All proper. Just speak to me in regards to the concentrate on security by Harmony Gold, and what’s been taking place for the final three consecutive quarters and the affect in your manufacturing.
BOIPELO LEKUBO: Overall on security we didn’t have a powerful efficiency, we should say.
Read: Harmony Gold experiences 4 mine deaths
Obviously for us embedding a protected working tradition is essential, so there’s a steady drive at enhancing security and the well being of our staff.
In phrases of the affect that it had I don’t have a selected determine on that. However, we’re working repeatedly to try to enhance on that, particularly with regard to lack of life.
NZINGA QUNTA: When it involves your headline earnings per share, that determine stood out at 49%. I do know we could also be harping on it, however simply give us extra perception into what occurred there.
BOIPELO LEKUBO: On the headline earnings per share, that was down in comparison with final 12 months, predominantly because of the impairment loss that we recognised, as I discussed earlier, the majority of which was [due to] our Tshepong operations.
We additionally took impairments on Bambanani, Kusasalethu and Moab Khotsong [mines], however the bulk associated to the Tshepong operation.
So the drop in headline earnings is admittedly on the again of that non-cash once-off [impairment].
NZINGA QUNTA: And then a ultimate dividend of twenty-two cents per abnormal share was declared. Talk me via the reasoning for declaring that dividend.
BOIPELO LEKUBO: The board total felt very snug simply by way of our plans going ahead. We do have a dividend coverage of returning 20% of free money to our shareholders.
In the primary half of the 12 months we had an interim dividend of 14 SA cents.
In the second half of the 12 months we didn’t generate money. However, given the sturdy stability sheet that we do have, and the ample liquidity to exhibit the sustainability of our dividend, it was vital for us to try this.
So we felt snug in declaring a ultimate dividend of twenty-two cents.
NZINGA QUNTA: Just speak me via your outlook as Harmony Gold. What do you see within the quick and medium time period?
BOIPELO LEKUBO: In the quick to medium time period, clearly [a real focus] on security, making certain that that our mines are protected. We are redirecting capital in direction of our high quality belongings to make sure that we drive down our all-in sustaining costs, and actually simply develop our margins and improve returns.
NZINGA QUNTA: Boipelo Lekubo, monetary director at Harmony Gold, thanks a lot to your time on the SAfm Market Update with Moneyweb this night.
