Harmony Gold Reduces Debt as Weak Rand Boosts Cashby
Gold down 9.9% in dollar terms; up 12% in rand this year
Company pays costs in rand, receives revenue in dollars
Harmony Gold Mining Co., which gets about 95 percent of its production from South Africa, repaid 1.1 billion rand ($77 million) of debt, or 27 percent of its total, as a plunging local currency relative to the dollar boosted cash flow.
Harmony “benefits from the weak rand, which more than offsets the impact of the low U.S. dollar gold price,” the Randfontein, South Africa-based company said in a statement Wednesday. The company had 4.1 billion rand of total debt at Sept. 30.
Gold in U.S. dollars, in which Harmony receives its revenue, has fallen 9.9 percent this year on speculation the Federal Reserve will raise interest rates, reducing demand for the haven precious metal. In South African rand, the currency that the producer pays its costs, bullion has climbed 12 percent this year. It currently trades at 491,870 rand a kilogram, just 4 percent below its record high in September.
Harmony’s mining operations are performing “in line with their plans” this year, the company said. The stock rose 6.5 percent to 9.38 rand a share at 1:12 p.m. in Johannesburg, the best performer in the five-member FTSE/JSE Africa Gold Mining Index on Wednesday.
Former Sasol Ltd. executive Peter Steenkamp will replace Graham Briggs as chief executive officer from Jan. 1, Harmony said last month.