HomeGoldGold Fields more than doubles profit

Gold Fields more than doubles profit

The carbon in leach
(CIL) plant at the
Gold Fields Tarkwa
mine in Ghana
Johannesburg, South Africa — MININGREVIEW.COM — 08 May 2009 – Gold Fields Limited – the second-biggest gold producer in Africa and fourth-largest in the world – more than doubled its third fiscal quarter profit on higher prices and output, reported a 146% jump in adjusted headline earnings per share during this period, and forecast a further increase in production.

Revealing this in a statement here, the company said it had also increased production during the quarter and had incurred lower costs to post an adjusted headline EPS of 204 cents in January-to-March quarter, versus 83 cents in the previous three months.

These earnings beat market expectations. An average estimate of five analysts polled by Reuters showed that they had expected an adjusted headline EPS of 201 cents.

CEO Nick Holland said in the statement that “while Gold Fields endured a very challenging three months, the company remains on a positive trajectory with its production increase.”

That production for the quarter rose 4% to 871 000 ounces, but was curbed from further gains because of operational hiccups at the group’s Beatrix mine in South Africa and at a newly expanded plant at its Tarkwa operation in Ghana.

Gold Fields said it had put in place measures to ensure that both operations would increase output in the current quarter. It has forecast a 3% rise in output to 900 000 ounces in the fourth fiscal quarter which ends on 30 June.

Total cash costs for the March quarter fell 2% to US$471 per ounce, but the company warned that this amount would rise to US$510 an ounce in the June quarter due to a stronger rand. South African gold producers earn in dollars for their gold sales, and pay for most of their costs in rand.

Reuters reports that the country’s gold producers are expected by analysts to report big jumps in earnings and cash flow for their quarters to March, largely boosted by a stronger gold price, which outweighed lower output and higher costs.

The price of gold in the quarter averaged US$908 per ounce – up 14% on the December quarter.