230812 Goldfields CEO Nick Holland at the company annual results that was held in Hydepark Summer place.photo by Simphiwe Mbokazi 453

Gold Fields would review its portfolio, notably capital investments, to stress the delivery of profits rather than ounces of metal, the world’s fourth-biggest gold producer said yesterday.

Chief executive Nick Holland said after the company reported second-quarter results that it did not want to focus on production “at any cost”, but aimed to ensure a steady flow of dividends by investing in projects that made robust returns.

“As an industry we’ve all been fixated on ounces. And we have to move away from ounces and onto cash flow and returns,” he said.

Asked if the company might sell assets as a result, Holland said: “There are no holy cows. Anything is possible.”

He added that it would start implementing the results of the review by the end of the year or the beginning of next year.

The company has a global presence and gets roughly half of its output outside South Africa, with a big focus on west Africa and South America.

As an example of investments that brought good returns, Holland cited the company’s buyouts of minority shareholdings in operations it controlled in Peru and Ghana, signalling the group’s intention to keep those assets.

“They are looking at quality ounces rather than quantity. They want to progress and expand their own operations, which already give them decent returns, rather than aggressively push at this time for new projects,” said David Davis, a mining investment analyst at SBG Securities.

“It seems that their 2015 target of 5 million ounces in production or in development has fallen away,” he said.

Gold Fields is the latest producer to review investments and the way it spends money amid an uncertain outlook. In South Africa, labour and power costs have been sharply rising and mine inflation is bubbling across the world.

Anglo American is currently undertaking a strategic review of its South African unit Anglo American Platinum amid depressed prices and a wave of labour unrest in the sector.

Gold Fields also said it was simplifying its dividend policy, but Holland said this was just for clarity and did not mean it would be paying more.

The new policy provides for a dividend payout of between 25 percent and 35 percent of normalised net earnings, irrespective of capital expenditure. It declared an interim dividend of R1.60 versus R1 last year.

Against the backdrop of a lower dollar/gold price during the quarter the company’s adjusted earnings a share fell about 17 percent to R2.50 from the previous quarter, below analysts’ forecast of R2.67.

Shares closed 1.22 percent higher at R112.30.