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Gold Fields expects up to 12% decrease in FY17 HEPS

Thursday, 8 February 2018

Dual-listed Gold Fields on Thursday said it expected as much as a 12% drop in its headline earnings per share (HEPS) for the 2017 financial year.

HEPS would be between $0.23 and $0.26 apiece.

Further, the gold producer expects to report a basic loss a share of $0.02 to $0.05, which would be 110% to 125% lower than the basic earnings a share of $0.20 reported in the 2016 financial year.

Gold Fields noted that its financial performance was impacted on by nonrecurring items, including a $278-million impairment of goodwill related to its struggling South Deep mine, outside Johannesburg. Post this impairment, the carrying value of South Deep is $1.96-billion.

The company also set aside a $30-million provision related to the ongoing silicosis and tuberculosis class action litigation.

The basic loss, headline earnings and normalised earnings were also all affected by an increase in amortisation, mainly at the Tarkwa, Cerro Corona and St Ives mines.

Normalised earnings for the year are expected to be 21% to 33% lower than the $0.24 a share reported in 2016, at $0.16 to $0.19 apiece.

Meanwhile, Gold Fields noted that it would extend the Cerro Corona mine's life from 2023 to 2030 through the creation of additional, cost-effective tailings capacity. As a result of the increased life, a previous impairment of $53-million had been reversed.

Attributable gold equivalent production for the fourth quarter is expected to be 546 000 oz, with all-in sustaining costs (AISC) of $959/oz and all-in costs (AIC) of $1 115/oz.

For the full year, attributable gold equivalent production is expected to be 2.16-million ounces, exceeding the guidance range.

AISC of $955/oz and AIC of $1 088/oz were both below the lower-end of the guidance range provided in February 2017.

Gold Fields will release its results on Wednesday, February 14.

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