Gold Fields’ earnings surge on higher gold prices
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GOLD Fields, which operates gold mines across three continents, expects a spike of up to 156 percent in basic earnings for the six months ended June 2021 thanks to a firmer gold price.
“The increase in earnings for the period is driven largely by an increase in revenue in both a higher gold price received and an increase in gold sold; a reduction in the loss on financial instruments; partially offset by higher net operating costs and higher tax,” said Gold Fields on Friday.
Basic earnings a share for the six months under review are expected to be up to 46 US cents (R6.72) a share, an increase of up to 156 percent from the 18 US cents in basic earnings a share reported for the six months ended 30 June 2020.
Headline earnings per share for the period are expected to be up to 47 US cents per share, up to 135 percent higher than the 20 US cents per share reported a year earlier.
Normalised earnings are expected to be up to 38 percent higher than the 37 US cents a share reported for the first half of 2020.
Gold Fields said the attributable gold equivalent production for the period had increased marginally year on year to 1.10 million ounces. All-in sustaining costs were 11 percent higher to $1 093 an ounce compared to $987 an ounce in 2020, driven by an increase in net operating costs, said the group.
“All-in costs for the first half of 2021 are 20 percent higher year-on-year at $1 274 an ounce compared with $1 065 an ounce in the first half of 2020 as project capital ramped up at the Salares Norte project in Chile,” said Gold Fields.
The $860 million Salares Norte project, which is under construction, is expected to meaningfully change Gold Field’s future profile by accelerating growth in production and reducing group all-in costs.
The construction is expected to be completed late next year with production expected in early 2023. Once in production, the mine’s average annual production is forecast to be 450 000 ounces of gold - equivalent for the first seven years, decreasing to around 355 000 ounces for the following three years.
The company said for the quarter ended June 2021, attributable group gold-equivalent production was 563 000 ounces up from 541 000 ounces in the previous quarter with an all-in sustaining cost for the quarter was $1 107 an ounce and all in costs of $1 297 an ounce.
Gold Fields' new chief executive Chris Griffith is expected to share his vision when the company releases its half year financial results later this month. In April Griffith succeeded Nick Holland, who retired after serving as chief executive for 13 years.
Gold Fields’s share price fell 1.35 percent on Friday to R143.34.
BUSINESS REPORT ONLINE