Harmony Gold Mining Company Limited HMY posted a loss of $40 million or 9 cents per share on a reported basis in first-quarter fiscal 2016 (ended Sep 30, 2015) versus a loss of $25 million or 6 cents per share in the year-ago quarter. However, first-quarter loss narrowed considerably from the sequentially prior-quarter’s reported loss of 60 cents per share. Loss in the reported quarter mainly resulted from foreign exchange translation losses.
The company’s shares moved up around 1.5% to close at $0.68 last Thursday, after rising as much as around 9% during the trading session that day.
Revenues and Costs
Revenues decreased 22.6% year over year to $319 million in the fiscal first quarter from $412 million registered in the year-ago quarter. Gold prices received fell 11.6% year over year to $1,133 per ounce (oz) in the fiscal quarter.
Gold production decreased 7.2% year over year to 281,385 oz in the fiscal first quarter. Gold production, however, increased 10% quarter over quarter due to an 8% improvement in underground tons milled and an 8% improvement in the underground recovered grade.
Gold ounces sold fell 12.5% year over year to 281,094 oz in the fiscal quarter, while increasing 5% from 267,523 oz recorded in the prior quarter.
Cost of sales decreased 21.4% year over year to $315 million in the reported quarter. Cash operating costs fell 10.4% year over year to $921 per oz and 8% from $1,003 per oz in the previous quarter. All-in-sustaining costs of $1,115 per oz declined 10.4% from the year-ago quarter and 10% from $1,233 per oz recorded in the prior quarter.
Financial Overview
Cash and cash equivalents decreased 47% to $107 million as of Sep 30, 2015 from $202 million as of Sep 30, 2014. Cash flow generated from operating activities was $56 million as of Sep 30, 2015, compared with $101 million as of Sep 30, 2014.
Outlook
Harmony Gold is well placed to gain from higher gold prices at an all-in sustaining cost of $1,040/oz at its South African underground operations. The company feels that the gold prices will remain flat in the medium term. In the long term, the company expects gold prices to increase.
Zacks Rank
Harmony Gold currently carries a Zacks Rank #3 (Hold).
Some better-ranked mining companies are NovaGold Resources Inc. NG, Asanko Gold Inc. AKG and Agnico Eagle Mines Limited AEM. All of them hold a Zacks Rank #2 (Buy).
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Click to get this free report AGNICO EAGLE (AEM): Free Stock Analysis Report NOVAGOLD RSRCS (NG): Free Stock Analysis Report HARMONY GOLD (HMY): Free Stock Analysis Report ASANKO GOLD INC (AKG): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research