HomeGoldHuge profit increase for Gold Fields

Huge profit increase for Gold Fields

Gold Fields Limited’s
St. Ives mine in
Johannesburg, South Africa — MININGREVIEW.COM — 30 January 2009 – Gold Fields Limited – the world’s fourth-largest producer of gold – posted a fourfold increase in second-quarter profit in FY 2009, after the rand weakened against the dollar, and it revealed that it had cut 3.8% of its workforce.

In a statement to the JSE, the company said net income had climbed to R542 million, or 83 cents a share, in the three months to 31 December 2008 from R120 million, or 18 cents a share, in the previous quarter.

Like other South African mining companies, Gold Fields was helped by a weakening of the local currency, because it sells the metal for dollars and pays most costs in rand. The company was also helped by a weaker Australian dollar, it said. The world economic slump is spurring Gold Fields and its competitors to reduce payrolls to help keep expenses down.

Cash costs were flat during the quarter “due to the weaker rand and Australian dollar,” the company added.

Gold production rose 5% to 839 000 ounces, the statement showed, compared with an Oct. 29 forecast of 840 000 ounces. Production costs in dollar terms fell to US$487 an ounce from US$617.

Data compiled by Bloomberg News shows that the rand and the Australian dollar both lost 11% against the U.S. currency during the reporting period. That boosted profit even as gold’s dollar value fell 8.2 percent to US$799.91 an ounce. Gold Fields got almost 16% of the latest year’s sales from its Australian St. Ives and Agnew mines.

The statement added that the re-structuring of the company that began in August had resulted in 2 047 workers taking up voluntary redundancy. The company has more than 54 000 employees.

Output in the March quarter is expected to increase by about 14% to 960 000 ounces, Gold Fields said.