Gold Fields Announces Half-year Results

Gold Fields Limited (NYSE:GFI, JSE:GFI) announced it’s half-year results with losses attributable to owners of the parent from continuing operations for the six months to 30 June 2018 of US$367 million. 

As quoted in the press release:

Profit of US$54 million for the six months to 30 June 2017. Normalized profit from continuing operations of US$43m for the six months to 30 June 2018 compared with US$78m for the six months to 30 June 2017.

The international operations continued to perform well for the six months ended June 2018 generating US$190m in net cash flow (before project capex) for the group.

Gold Fields is in a strong financial position, with the integrity of the balance sheet remaining intact after funding cumulative project expenditure (Damang and Gruyere) of US$330 million over the past 18 months.

As reported in the recent trading statement, attributable gold equivalent production from continuing operations, for the six months ended 30 June 2018, was 994koz (for the six months ended June 2017: 1,022 thousand ounces). All-in sustaining costs for the period were US$965 per ounce (for the six months ended June 2017: US$967 per ounces), with all-in costs of US$1,169 per ounce (for the six months ended June 2017: US$1,092 per ounce) as a result of the higher project capital, as was planned.

Normalized profit from continuing operations for the six months ended June 2018 was US$43 million or US$0.05 per share, compared with US$78 million or US$0.09 per share in for the six months ended June 2017. Normalized profit was impacted by higher exploration expenditure this half year particularly as activities at Salares Norte have increased to complete the feasibility study by year end.

In line with our dividend policy of paying out between 25 percent and 35 percent of normalized profit as dividends, we have declared an interim dividend of 20 SA cents per share which compared with the 2017 interim dividend of 40 SA cents per share.

Net cash flow for continuing operations from operating activities less net capital expenditure and environmental payments was an outflow of US$79 million, compared with an outflow of US$102 million for the six months ended June 2017, mainly due to the growth capital spent at Gruyere, Damang and Salares Norte. We previously indicated that we expected to be cash negative in 2017and 2018 as a consequence of building two new mines in the Group and our ongoing study at Salares Norte. Excluding the project capital of US$179m for the half year, the net cash flow would have been an inflow of US$100 million for the six months ended June 2018.

The net debt balance increased by US$90 million to US$1,393 million from US$1,303 million at the end of FY 2017, with the net debt to EBITDA ratio marginally higher at 1.07x (December 2017: 1.03x) but still well below the debt covenant level of 2.5x.