Dual-listed Gold Fields has announced normalized earnings from continuing operations of US$141 million for the year ended December 2017 compared with US$190 million for the year ended December 2016.
A final dividend number 87 of 50 SA cents per share (gross) is payable on 12 March 2018, giving a total dividend for
the year ended December 2017 of 90 SA cents per share (gross).
“At the end of 2016, Gold Fields entered into a period of reinvesting into the business. 2017 was set to be a tough
year, with the group expecting a cash outflow for the year given the increased level of project capital expenditure,” says Gold Fields CEO, Nick Holland.
“We are pleased to announce that the group was largely cash neutral for FY17, on the back of better than expected
metal prices and out performance from the international operations.
“Despite incurring project capital of US$115 million at Damang, A$106 million (US$81 million) at Gruyere, R225 million (US$17 million), at South Deep, US$53 million on the feasibility study at Salares Norte as well as A$78 million (US$60 million) in respect of the deferred portion of the purchase price of our 50% in Gruyere, the net cash outflow was limited to US$2 million during 2017.
“Importantly, cash flow from Gold Fields operations excluding growth projects was US$329 million.
“If South Deep growth and the Damang reinvestment of US$17 million and US$115 million, respectively, are excluded, then the mining operations generated US$441 million. This places Gold Fields in a comfortable position to take on another high capex year in 2018 as both,” continues Holland.
“For the fifth consecutive year, Gold Fields has met or exceeded our production and cost guidance for the year.
“Attributable gold equivalent production for 2017 was 2.16 Moz (FY16: 2.15 Moz), exceeding guidance of 2.10-2.15 Moz.
“All-in sustaining costs (AISC) and all-in costs (AIC) were US$955/oz (FY16: US$980/oz) and US$1,088/oz (FY16: US$1,006/oz), respectively, both below the lower end of the guidance range provided in February 2017 – AISC: US$1,010-1,030/oz and AIC: US$1,170-1,190/oz. The international operations all exceeded guidance for the year, once again highlighting the quality of these assets.
“South Deep was unable to recover from the tough Q1 2017 which was impacted by two fatalities and three falls of ground in the high grade corridors, with production for the year 11% below original guidance (costs were only 3% above guidance), as flagged in Q3 2017 operating results in October 2017,” explains Holland.
“As per our trading statement released on 8 February 2018, headline earnings for 2017 were US$194 million or US$0.24 per share. Net loss for the year was US$35 million or US$0.04 per share. Normalized earnings for the year was US$138 million or US$0.17 per share.
“In line with our dividend policy of paying out 25% to 35% of net earnings as dividends, we declared a final dividend
of 50 SA cents per share. This takes the total dividend for the year to 90 SA cents per share (FY16: 110 SA cents per
“On the back of the cash break even position from operating activities achieved for the year, the net debt at
31 December 2017 was US$1,303 million, compared to US$1,166 million at the end of FY16. This implies a net debt to adjusted EBITDA of 1.03x, compared to 0.95x at the end of December 2016 and largely in line with our target of 1.0x.
Feature image credit: Wikimedia