Harmony Gold Mining Company Limited HMY posted a bigger loss of $261 million or 60 cents per share on a reported basis in fourth-quarter fiscal 2015 (ended Jun 30, 2015) compared with a loss of $116 million or 27 cents per share a year ago. The bottom line was hit by a hefty impairment related to its Hidden Valley, Doornkop and Phakisa operations. Earnings (as adjusted) were 3 cents per share for the reported quarter, flat year over year.

For fiscal 2015, reported loss was $396 million or 91 cents per share compared with a loss of $118 million or 27 cents per share a year ago. Loss (as adjusted) was 16 cents per share as against earnings of 2 cents per share in fiscal 2014.

Revenues and Costs

Revenues decreased 10.6% year over year to $320 million in the fourth quarter from $358 million registered in the year-ago quarter. The decline resulted from decrease in amount of gold sold. Gold prices received fell 7.3% year over year to $1,195 per ounce (oz) in the quarter. For fiscal 2015, revenues declined 11% to $1,348 million from $1,515 million a year ago. Gold prices received declined 5.9% year over year to $1,222 per oz.

Gold production decreased 10.7% year over year to 256,465 oz in the fourth quarter. Gold production, however, increased 4.4% quarter over quarter due to meaningful improvements from Tshepong and Target 1 operations.

Production profit for the fourth quarter fell 35.8% from $81 million a year ago and 5.5% from the sequentially prior quarter to $52 million.

Gold ounces sold fell 3.6% year over year to 267,523 oz in the fourth quarter, while increasing 11.8% from 239,330 oz recorded in the prior quarter.

Cost of sales increased 29.2% year over year to $606 million in the reported quarter. Cash operating costs fell 0.8 year over year to $1,003 per oz and rose 0.2% from $1,001 per oz in the previous quarter. All-in-sustaining costs of $1,233 per oz declined 2.7% from the year-ago quarter and 2% from $1,258 per oz recorded in the prior quarter.

Financial Overview

Cash and cash equivalents decreased 48.8% to $88 million as of Jun 30, 2015 from $172 million as of Jun 30, 2014. Cash flow generated from operating activities was $45 million as of Jun 30, 2015, compared with $46 million as of Jun 30, 2014.

Outlook

Harmony Gold has restructured each of its operations to ensure that it is profitable amid a weak gold price environment. The company is adding value through job creation, taxes and community upliftment across South Africa and Papua New Guinea. Its focus remains on boosting its margins through capital reductions and cost cuts and increased production.

Zacks Rank

Harmony Gold currently carries a Zacks Rank #3 (Hold).

Some better-ranked mining stocks include Denison Mines Corp. DNN, OCI Resources LP OCIR and Zenyatta Ventures Ltd ZENYF. All of these hold a Zacks Rank #2 (Buy).

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