Gold price helps boost normalised earnings 5% at Gold Fields

Gold Fields reported a 5% rise in normalised earnings to $900m (R17bn) in the year ended December, supported in part by a higher rand-gold price.

Gold Fields and the gold sector are insulated against the downturn in the commodity markets because of buoyant demand for gold, which is perceived as a safe-haven asset.

The gold producer has mines in Australia, Ghana, SA and Chile, meaning it is exposed to the vagaries of the foreign-exchange markets.

However, forex markets worked in its favour during the reporting period, as reflected by the weaker rand against the dollar.

New chief executive Mike Fraser said in a results statement yesterday that Gold Fields was committed to building a business that would deliver “competitive returns to shareholders and sustainable value for stakeholders through the price cycles .

“This means”being disciplined about how we allocate capital, reducing costs in a sustainable manner and ... pursuing accretive growth opportunities to maximise the value and quality of our portfolio,” he said.

Fraser stepped into his new role earlier in February, replacing Martin Preece, who was an interim chief executive after the sudden departure of Chris Griffith in 2022.

Gold Fields generated free cash flow from operations of $1bn (R18.89bn) during the reporting period versus $855m (R16.15bn) a year ago, which enabled it to declare a total dividend of R7.45, the same as 2022.

This is equivalent to 40% of its normalised earnings, in line with its policy of paying 30%45% of normalised earnings in dividends.

The gold output, excluding Asanko Gold Mine in Ghana, was in line with its guidance at 2.24-million ounces while allin-sustaining costs the industry metric to measure total cost of production was $1,295/oz, better than the guided range of between $1,300/oz and $1,340/oz.

For 2024, attributable gold equivalent production is expected to be between 2.33-million ounces and 2.43-million ounces while all-in-sustaining costs will be expected to be between $1,410/oz and $1,460/oz.