Durban - Gold producer Gold Fields expects a profit windfall after it reported in a trading update on Friday that it expected headline earnings per share to leap by between 730percent and 780percent for the year to the end December from a headline loss per share of US 4cents (R0.53) reported the previous year.
Headline earnings per share (Heps) are a key measure of profitability.
The dual-listed company said it was expecting its earnings per share (EPS) to be up by between 160percent and 170percent (US49c a share to US52c) for the year to end December.
The earnings would be higher than the loss per share of US31c per share as reported for the twelve months to end December 2015.
At the normalised level, the company added that earnings per share were expected to be 280percent and 320percent higher than the previous year.
Lower costs
“The increases in EPS, Heps and normalised earnings are primarily driven by an increase in the dollar gold price (8percent year-on-year) and lower net operating costs in local currencies as well as the impact of converting these costs at weaker exchange rates. In addition, EPS is impacted by lower non-recurring items,” the company said.
In November 2016, Gold Fields acquired 50percent of Western Australian mine Gruyere for A$350million (R3.56billion) from Sydney-listed Gold Road Resources.
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In financial 2016, the Australian dollar was 1percent weaker year-on-year and the rand was 13percent weaker year-on-year against the US dollar.
It also said joint-venture partner Gold Road Resources would also receive a 1.5percent royalty on Gold Field’s share of production provided it reached a minimum of 2 million ounces of gold a year.
Gold Fields will release its financial results on February 16.
Gold Fields shares were 1.74percent lower on the JSE on Friday to close at R46.78.