Harmony Gold says impairments will dent full-year earnings

The company is due to report full-year results on Tuesday.

FILE: Harmony Gold's Doornkop shaft. Picture: Harmony Gold

JOHANNESBURG - Harmony Gold said on Friday its full-year earnings would be lower than last year due to impairments against a number of its mines as well as foreign exchange losses.

The gold producer said it expected headline earnings per share (HEPS) - the main profit measure in South Africa that strips out certain one-off items - to fall to between 164 and 179 cents in the year ended 30 June 2018, from 298 cents a year earlier.

The company is due to report full-year results on Tuesday.

Harmony said it made impairments of R5.3 billion ($386 million) against the following mines - Tshepong, Target 1, Joel, Kusasalethu, Unisel, Masimong, Doornkop and the undeveloped Target North - due to spiralling costs and a subdued gold price.

Its full-year results would also be hit by an exchange rate loss of about R669 million on its US dollar-denominated debt, compared to an exchange rate gain of R215 million in the previous comparable period.

Harmony Gold and other South African gold producers are engaged in annual wage negotiations with unions.

Unions rejected an initial offer from the companies and are now discussing a revised offer.

Harmony Gold’s shares were down 2.5% at R21.77 at 1122 GMT.