Gold Fields expects half-year earnings to dive on higher costs

Headline earnings per share (Heps) for Gold Fields for the interim period to June, 2024 are expected to be lower by at least 25% compared to the previous contrasting period, on the back of lower gold production although the company expects to bump up its output in the second half-year period.

Gold Fields expects Heps for the first half of the current year to be in the range of $0.38 (R7.12) to $0.34 per share. This will be lower compared to the 2023 same period Heps of $0.45 by between 25% and 33%.

The expected plunge in the company’s earnings has come against the backdrop of an expected dive in Gold Fields’s gold production for the half year, which is expected to be lower compared to the same period in 2023, by about 20% at 918 000 ounces. The lower gold productivity for the half-year period is expected to impact the company’s cost base.

“The lower gold volumes sold, which are expected to improve in the second half of the year have had a significant impact on unit costs for the period with all-in costs for H1 2024 expected to be 47% higher year on year at $2 060 per ounce, and all-in-sustaining costs expected to be 44% higher at $1 745 per ounce,” said the company.

Gold Fields explained that its costs for the period had also been impacted by an 18% increase in capital expenditure which included increased capitalised waste stripping at its Gruyere, St Ives, and Tarkwa mines as well as costs for renewable energy capital at the St Ives mine.

Its lower earnings for the period have been attributed to lower production at the South Deep mine due to increased backfill rehandling, and challenging ground conditions.

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