Gold Fields rises on upbeat update

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Gold Fields rises on upbeat update

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Published Date: 2019-08-05 | Source: Stephen Gunnion | Author: Stephen Gunnion

Gold Fields rises on upbeat update

The gold producer will report a near doubling in normalised earnings when it releases its interim results next week.

Gold Fields' shares rallied on Friday after it said it would report positive basic earnings for the first half of its financial year. However, the gold producer said its headline earnings would show a decline.

In a trading statement, the group said it would report basic earnings per share (EPS) of between 8 US cents and 10 US cents for the six months to end-June, an improvement of between 118% and 122% from last year's 45c per share loss. Headline EPS would be 10% to 15% lower than the 8c per share it reported last year, while normalised earnings were expected to be 160% to 240% up from the prior period's 5c per share. Headline earnings are used as a gauge of profitability and exclude certain once-off items. It gave no reasons for the variance between the different measures.

Production for the six months rose 9% to 1.08 million ounces, boosted by the inclusion of its Asanko Gold Mines joint venture. It bought a 50% stake in the Ghanaian mine last year. Its results would also reflect the World Gold Council's updated guidance on all-in sustaining costs, which would amount to $891 per ounce for the six month period. On the previous interpretation, AISC would have been marginally higher year-on-year at $973 ounces.

Investors will also be watching its interim results for evidence that its troublesome South Deep gold mine has continued to meet its targets for the year. In May, it said it was on track following last year's restructuring, which saw it close loss-making shafts, reduce its cost base and retrenched just over 1,500 employees and contractors. The restructuring was expected to achieve a significant reduction in cash losses this year and set the mine up for long-term and sustainable growth. The measures were taken after it had to impair the value of the mine by a further $359 million after tax last year.

It reports its results on 15 August. Its shares closed 5.3% higher at R79.11 on Friday.





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