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Reviewed Results | Six months ended 30 June 2022

Financials Notes to the condensed consolidated financial statements

1. Revenue

  United States Dollars
  Six months ended
Figures in millions unless otherwise stated June 2022 (Reviewed)
June 2021 (Unreviewed)
Revenue from contracts with customers 2,235.3 1,983.6
– Gold1 2,132.1 1,877.2
– Copper2 103.2 106.4
Disclosure of disaggregated revenue from contracts with customers    
The Group generates revenue primarily from the sale of gold bullion and copper concentrate to refineries and banks. All revenue from contracts with customers is recognised at a point in time. The Group also produces silver which is an insignificant by-product.    
The disaggregation of revenue from contracts with customers by primary geographical market and product is described in the Segmental Operating and Financial Results.    

2. Cost of sales

   United States Dollars 
   Six months ended 
Figures in millions unless otherwise stated  June 2022   (Reviewed)  June 2021
  (Unreviewed)
Salaries and wages  (199.9) (188.4)
Consumable stores  (187.6) (152.3)
Utilities  (69.6) (65.7)
Mine contractors  (322.5) (298.5)
Other  (164.3) (153.3)
Cost of sales before gold inventory change and amortisation and depreciation  (943.9) (858.2)
Gold inventory change  21.3  26.6 
Cost of sales before amortisation and depreciation  (922.6) (831.6)
Amortisation and depreciation  (377.8) (314.9)
Total cost of sales  (1,300.4) (1,146.5)

3. Investment Income

  United States Dollars
  Six months ended
Figures in millions unless otherwise stated June 2022 (Reviewed)
June 2021 (Unreviewed)
Interest received – environmental trust funds 0.6 0.4
Interest received – cash balances 2.9 3.5
Total investment income 3.5 3.9

4. Finance expense

  United States Dollars
  Six months ended
Figures in millions unless otherwise stated June 2022 
(Reviewed)

June 2021 
(Unreviewed)
Interest expense – borrowings (37.9) (40.5)
Interest expense – lease liability3 (11.3) – 
Interest expense – environmental rehabilitation3 (6.0) – 
Borrowing costs capitalised4   17.0   4.5 
Total finance expense (38.2) (36.0)
3 Lease interest of US$12.3m and environmental rehabilitation interest adjustments of US$4.3m for the six months ended 30 June 2021 were included in other costs. Refer note 9.
4 General borrowing costs of US$17.0m (June 2021: US$4.5m) arising on Group general borrowings were capitalised during the periods and related to the Salares Norte project. An average interest capitalisation rate of 3.1% (June 2021: 2.9%) was applied.

5. Share of results of equity-accounted investees, after taxation

   United States Dollars 
   Six months ended 
Figures in millions unless otherwise stated  June 2022  
(Reviewed)
June 2021 
(Unreviewed)
Far Southeast Gold Resources Incorporated ("FSE") (0.6) (0.7)
Asanko Gold  (3.8) 17.2 
Other  (0.7) – 
Share of results of equity-accounted investees, after taxation  (5.1) 16.5 

6. Gain/(loss) on financial instruments

    United States Dollars  
    Six months ended  
Figures in millions unless otherwise stated   June 2022   (Reviewed)   June 2021
  (Unreviewed)
Unrealised gain/(loss) and prior year mark-to-market reversals on derivative contracts  8.0  (38.3)
Realised gain/(loss) on derivative contracts  15.4  (14.3)
Maverix warrants – loss on fair value    (0.5)
Total gain/(loss) on financial instruments  23.4  (53.1)

Hedging/derivatives

The Group's policy is to remain unhedged to the gold price. However, hedges are sometimes undertaken as follows:

  • to protect cash flows at times of significant expenditure;
  • for specific debt servicing requirements; and
  • to safeguard the viability of higher cost operations.

Gold Fields may from time to time establish currency financial instruments to protect underlying cash flows.

Derivative instruments*

Ghana – Oil hedge

In June 2019 fixed price ICE Gasoil cash settled swap transactions were entered into for a total of 123.2 million litres of diesel for the period January 2020 to December 2022 based on 50% of usage over the specified period. The average swap price is US$575 per metric tonne (equivalent to US$75.8 per barrel). At the time of the transactions, the average Brent swap equivalent over the tenor was US$59.2 per barrel.

At the reporting date, the marked-to-market value on the hedge was a positive US$8.7m with a realised profit of US$8.3m for the six months ended 30 June 2022.

Australia – Oil hedge

In June 2019 fixed price Singapore 10ppm Gasoil cash settled swap transactions were entered into for a total of 75.0 million litres of diesel for the period January 2020 to December 2022 based on 50% of usage over the specified period. The average swap price is US$74.0 per barrel. At the time of the transactions, the average Brent swap equivalent over the tenor was US$57.4 per barrel.

At the reporting date, the marked-to-market value on the hedge was a positive A$8.5m (US$5.9m) with a realised profit of A$7.5m (US$5.4m) for the six months ended 30 June 2022.

Salares Norte – Currency hedge

In March 2020, a total notional amount of US$544.5m was hedged at a rate of CLP/US$836.45 for the period July 2020 to December 2022.

At the reporting date, the marked-to-market value on the hedge was a negative US$8.6m with a realised profit of US$1.6m for the six months ended 30 June 2022.

Outstanding hedges

At 30 June 2022, the following hedges are outstanding:

  • Australia oil – a total of 13.3 million litres of diesel at an average swap price of US$74.0 per barrel using fixed price Singapore 10ppm Gasoil cash settled swap transactions for the period July 2022 to December 2022.
  • Ghana oil – a total of 21.3 million litres of diesel at an average swap price of US$77.1 per barrel using fixed price ICE Gasoil cash settled swap transactions for the period July 2022 to December 2022.
  • Salares Norte currency hedge – a total notional amount of US$78.8m at a rate of CLP/US$836.45 for the period July 2022 to December 2022.

* Have not been designated for hedge accounting and the changes in fair value are reflected in profit or loss.

7. Share-based payments

  United States Dollars
  Six months ended
Figures in millions unless otherwise stated June 2022 
(Reviewed)

June 2021 
(Unreviewed)
Share based payment expense1 (4.1) (6.4)
Total included in profit or loss for the period (4.1) (6.4)
1 The Group granted equity-settled instruments comprising share options and restricted shares to executive directors, certain officers and employees. During the periods ended 30 June 2022 and 2021, the Gold Fields Limited 2012 Share Plan as amended in 2016 was in place. At the Annual General Meeting on 18 May 2016, shareholders approved the adoption of the revised Gold Fields Limited 2012 Share Plan to replace the long-term incentive scheme ("LTIP"). The plan provides for four types of participation, namely Performance Shares ("PS"), Retention Shares ("RS"), Restricted Shares ("RSS") and Matching Shares ("MS"). This plan is in place to attract, retain, motivate and reward participating employees on a basis which seeks to align the interests of such employees with those of the Company's shareholders.

8. Long-term incentive plan

  United States Dollars
  Six months ended
Figures in millions unless otherwise stated June 2022 
(Reviewed)

June 2021 
(Unreviewed)
Long-term incentive plan expense2 (11.4) (11.5)
Total included in profit or loss for the period (11.4) (11.5)
2 Senior and middle management receive awards under the LTIP. The performance conditions of the LTIP are approved annually by the Remuneration Committee. The expected timing of the cash outflows in respect of each grant is at the end of three years after the original award was made.

9. Included in profit before royalties and taxation are the following

  United States Dollars
  Six months ended
Figures in millions unless otherwise stated June 2022 
(Reviewed)
June 2021 
(Unreviewed)
Included in profit before royalties and taxation are the following    
Environmental rehabilitation interest adjustment3,4 –  (4.3)
Unwinding of discount on silicosis settlement costs3 (0.5) (0.6)
Lease interest3,4 –  (12.3)
Social contributions and sponsorships3 (7.6) (8.1)
Offshore structure costs3 (7.2) (7.7)
3 Included under "Other costs, net" in the consolidated income statement.
4 Lease interest of US$11.3m and environmental rehabilitation interest adjustments of US$6.0m for the six months ended 30 June 2022 were included in net interest expense. Refer note 4.

10. Exploration expense

  United States Dollars
  Six months ended
Figures in millions unless otherwise stated June 2022 
(Reviewed)
June 2021 
(Unreviewed)
Exploration expense    
Australia (10.0) (14.6)
Ghana (6.3) (4.8)
Peru (1.3) (0.8)
Chile (15.2) (12.7)
Other (0.5)
Total exploration expense (32.8) (33.4)

11. Royalties

  United States Dollars
  Six months ended
Figures in millions unless otherwise stated June 2022    
(Reviewed)   
June 2021   
(Unreviewed)  
South Africa (1.5)    (1.1)  
Foreign (57.1)    (53.0)  
Total royalties (58.6)    (54.1)  
Royalty rates    
South Africa (effective rate)4 0.5% 0.5%
Australia5 2.5% 2.5%
Ghana6 4.1% 4.1%
Peru7 3.9% 3.9%
4 Lease interest of US$11.3m and environmental rehabilitation interest adjustments of US$6.0m for the six months ended 30 June 2022 were included in net interest expense. Refer note 4.
5 The Mineral and Petroleum Resource Royalty Act 2008 ("Royalty Act") was promulgated on 24 November 2008 and became effective from 1 March 2010. The Royalty Act imposes a royalty on refined (mineral resources that have undergone a comprehensive level of beneficiation such as smelting and refining as defined in Schedule 1 of the Act) and unrefined (mineral resources that have undergone limited beneficiation as defined in Schedule 2 of the Act) minerals payable to the state. The royalty in respect of refined minerals (which include gold refined to 99.5% and above and platinum) is calculated by dividing earnings before interest and taxes ("EBIT") by the product of 12.5 times gross revenue calculated as a percentage, plus an additional 0.5%. EBIT refers to taxable mining income (with certain exceptions such as no deduction for interest payable and foreign exchange losses) before assessed losses but after capital expenditure. A maximum royalty of 5% has been introduced on refined minerals. The effective rate of royalty tax payable for the period ended 30 June 2022 was 0.5% of mining revenue (30 June 2021: 0.5%) equalling the minimum charge per the formula.
6 The Australian operations are subject to a 2.5% (June 2021: 2.5%) gold royalty on revenue as the mineral rights are owned by the state.
7 Minerals are owned by the Republic of Ghana and held in trust by the President. During 2016, Gold Fields signed a Development Agreement ("DA") with the Government of Ghana for both the Tarkwa and Damang mines. This agreement stated that the Ghanaian operations will be subject to a sliding scale for royalty rates, linked to the prevailing gold price (effective 1 January 2017). The sliding scale is as follows:
 

Average gold price
   
Low value   High value   Royalty rate
US$0.00 US$1,299.99   3.0% 
US$1,300.00 US$1,449.99   3.5% 
US$1,450.00 US$2,299.99   4.1% 
US$2,300.00 Unlimited   5.0% 
8 The Peruvian operations are subject to a mining royalty calculated on a sliding scale with rates ranging from 1% to 12% of the value of operating profit.

12. Mining and income taxation

  United States Dollars
  Six months ended
Figures in millions unless otherwise stated June 2022 
(Reviewed)

June 2021 
(Unreviewed)
The components of mining and income tax are the following:    
South African taxation    
– dividend withholding tax (6.1) (13.1)
– company and capital gains taxation (1.7) (1.1)
– prior year adjustment – current taxation (1.4)
– deferred taxation (45.3) (0.6)
Foreign taxation    
– current taxation (216.4) (176.7)
– deferred taxation (4.0) (23.2)
Total mining and income taxation (273.5) (216.1)
South Africa – current tax rates    
Mining tax1 Y=34-170/X Y=34-170/X
Non-mining tax2 28.0% 28.0%
Company tax rate 28.0% 28.0%
International operations – current tax rates    
Australia 30.0% 30.0%
Ghana 32.5% 32.5%
Peru 29.5% 29.5%
1 South African mining tax on mining income is determined according to a formula which takes into account the profit and revenue from mining operations. South African mining taxable income is determined after the deduction of all mining capital expenditure, with the proviso that this cannot result in an assessed loss. Capital expenditure amounts not deducted are carried forward as unredeemed capital expenditure to be deducted from future mining income. Accounting depreciation is ignored for the purpose of calculating South African mining taxation. During June 2022, the South African Revenue Services published the draft 2022 Rates & Monetary Bill, inclusive of an amendment to the gold tax formula from
Y = 34 – 170/X to Y = 33 – 165/X in respect of year assessments ending on or after 31 March 2023, which is considered to be substantively enacted. This resulted in the effective mining tax rate used for deferred tax purposes for Gold Fields Operations Limited ("GFO") and GFI Joint Venture Holdings (Proprietary) Limited ("GFIJVH"), owners of the South Deep mine, decreasing from 29% at 30 June 2021 to 28% at 30 June 2022, amounting to a charge of R76.2m (US$4.9m) through profit or loss.
In the formula above, Y is the percentage rate of tax payable and X is the ratio of mining profit, after the deduction of redeemable capital expenditure, to mining revenue expressed as a percentage.
2 Non-mining income of South African mining operations consists primarily of interest income. The corporate income tax rate will be reduced from 28% to 27% for tax years ending on after 31 March 2023, and is considered to be substantively enacted.

Deferred tax is provided at the expected future rate for mining operations arising from temporary differences between the carrying values and tax values of assets and liabilities. In South Africa the tax rate which has been used for deferred tax purposes for mining assets is Y = 33 – 165/X and for non-mining assets is 27%, on the basis that these rates are considered to be substantively enacted.

13. Earnings per share

   United States Dollars 
   Six months ended 
Figures in millions unless otherwise stated  June 2022 
(Reviewed)
 
June 2021 
(Unreviewed)
Basic earnings per share – cents  57  44 
US$509.7m (June 2021: US$387.4m) by the weighted average number of ordinary shares in issue during the period of 890,640,752 (June 2021: 886,888,524).       
Diluted earnings per share – cents  56  43 
Diluted earnings per share is calculated by dividing the diluted profit attributable to owners of the parent of US$504.9m (June 2021: US$385.0m) by the diluted weighted average number of ordinary shares in issue during the period of 894,668,622 (June 2021: 892,457,239).       
Net profit attributable to owners of the parent has been adjusted by the following to arrive at the diluted profit attributable to owners of the parent:       
Profit attributable to owners of the parent  509.7  387.4 
South Deep minority interest at 10%  (4.8) (2.4)
Diluted profit attributable to owners of the parent  504.9  385.0 
The weighted average number of shares has been adjusted by the following to arrive at the diluted number of ordinary shares:       
Weighted average number of ordinary shares  890,640,752  886,888,524 
Share options in issue  4,027,870  5,568,715 
Diluted weighted average number of ordinary shares  894,668,622  892,457,239 
Headline earnings per share – cents  58.0  45 
Headline earnings per share is calculated by dividing headline earnings of US$518.0m (June 2021: US$395.5m) by the weighted average number of ordinary shares in issue during the period of 890,640,752 (June 2021: 886,888,524).       
Net profit attributable to owners of the parent is reconciled to headline earnings as follows:       
Long-form headline earnings reconciliation       
Profit attributable to owners of the parent  509.7  387.4 
Profit on disposal of assets, net  0.1  (6.2)
Gross  0.1  (8.9)
Taxation effect  —  2.7 
Non-controlling interest effect  —  — 
Impairment, reversal of impairment and write-off of investments and assets and other, net  8.2  14.3 
Impairment, net of reversal of impairment of investments and assets  9.3  4.2 
Write-off of exploration and evaluation assets  —  14.6 
Taxation effect  (1.1) (4.5)
Non-controlling interest effect  —  — 
Headline earnings  518.0  395.5 
Diluted headline earnings per share – cents  57.0  44 
Diluted headline earnings per share is calculated by dividing diluted headline earnings of US$513.2m (June 2021: US$393.1m) by the diluted weighted average number of ordinary shares in issue during the period of 894,668,622 (June 2021: 892,457,239).       
Headline earnings has been adjusted by the following to arrive at dilutive headline earnings:       
Headline earnings  518.0  395.5 
South Deep minority interest at 10%  (4.8) (2.4)
Diluted headline earnings  513.2  393.1 

14. Impairment of investments and assets

  United States Dollars
  Six months ended 
Figures in millions unless otherwise stated June 2022 
(Reviewed)
June 2021 
(Unreviewed)
Investments (5.7) (3.8)
Equity-accounted investees    
– Far Southeast Gold Resources Incorporated ("FSE")1 (5.7) (3.8)
Property, plant and equipment (3.6) (0.4)
Impairment of property, plant and equipment – other2 (3.6) (0.4)
Impairment of investments and assets (9.3) (4.2)
1 During the six month period ended 30 June 2022, impairment indicators were identified as a result of the reduction in the share price of Lepanto and FSE was impaired by US$5.7m (June 2021: US$3.8m) to its recoverable amount. The recoverable amount was based on the fair value less cost of disposal (“FVLCOD”) of the investment (level 2 in the fair value hierarchy). The FVLCOD was indirectly derived from the market value of Lepanto Consolidated Mining Company, being the 60% shareholder of FSE.
2 The US$3.6m in 2022 comprises US$3.0m (June 2021: US$0.4m) impairment of redundant assets in Peru and US$0.6m (June 2021: US$0m) impairment of redundant assets in Chile.

15. Debt maturity ladder (Reviewed)

Figures in millions unless otherwise stated 31 Dec
2022
31 Dec
2023
31 Dec
2024
31 Dec
2025
31 Dec
2026
31 Dec
2029
Total
Uncommitted loan facilities              
Rand debt 1,362.0 1,362.0
Rand debt translated to US Dollar 83.6 83.6
Total (US$m) 83.6   83.6
Committed loan facilities              
US Dollar debt 45.0 1,348.3 45.0 460.0 496.9 2,395.2
Rand debt 2,500.0 2,500.0
A$ Dollar debt 500.0 500.0
Rand debt translated to US Dollar 153.5 153.5
A$ Dollar debt translated to US Dollar 345.0 345.0
Total (US$m) 543.5 1,348.3 45.0 460.0 496.9 2,893.7
Total (US$m) Uncommitted and committed loan facilities 83.6 543.5 1,348.3 45.0 460.0 496.9 2,977.3
Utilisation – Uncommitted loan facilities              
Rand debt
Rand debt translated to US Dollar
Total (US$m)
Utilisation – Committed loan facilities (including US Dollar bond)              
US Dollar debt 581.8 496.9 1,078.7
Rand debt
A$ Dollar debt 140.0 140.0
Rand debt translated to US Dollar
A$ Dollar debt translated to US Dollar 96.6 96.6
Total (US$m) 96.6 581.8 496.9 1,175.3
Total (US$m) – Utilisation – Uncommitted and committed loan facilities 96.6 581.8 496.9 1,175.3

Exchange rate: US$1.00 = R16.29 and US$1.00 = A$0.69 being the closing rates at 30 June 2022.

16. Fair value hierarchy

The Group has the following hierarchy for measuring the fair value of assets and liabilities at the reporting date:

Level 1 : Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2: Inputs other than quoted prices in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. There were no transfers during the periods ended 30 June 2022 and 31 December 2021.

The following table sets out the Group's financial assets and financial liabilities by level within the fair value hierarchy at the reporting date:

  United States Dollars
  30 June 2022 (Reviewed) 31 December 2021 (Audited)
Figures in millions unless otherwise stated Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3
Financial assets measured at fair value







Environmental trust funds 2.9 2.9 2.9 2.9
Trade receivables from provisional copper sales 2.6 2.6 25.8 25.8
Investments – listed 18.6 18.6 30.9 30.9
Asanko redeemable preference shares 96.6 96.6 94.5 94.5
Oil derivative contracts 14.6 14.6 5.1 5.1
Financial assets not measured at fair value







Environmental trust funds 109.6 109.6 85.2 85.2
Loan advanced – contractor 27.3 27.3 27.3 27.3
Financial liabilities measured at fair value







Foreign exchange derivative contracts 8.6 8.6 6.8 6.8
Financial liabilities not measured at fair value







Borrowings 1,183.4 1,003.3 180.1 1,191.6 1,108.1 83.5

Environmental trust funds
are measured at fair value through profit or loss and amortised cost which approximates fair value based on the nature of the fund's underlying investments.

Trade receivables from provisional copper sales

Valued using quoted market prices based on the forward London Metal Exchange ("LME") and, as such, classified within Level 2 of the fair value hierarchy.

Listed investments

Comprise equity investments in listed entities and therefore valued using quoted market prices in active markets.

Asanko redeemable preference shares

The fair value is based on the expected cash flows of the Asanko Gold Mine based on the life-of-mine model. The key inputs used in the valuation of the fair value were market related interest rates and expected redemption period.

Oil and foreign exchange derivative contracts

The fair values of these contracts are determined by using the applicable valuation models for each instrument type with the key inputs being forward prices, interest rates, volatilities and exchange rates.

Borrowings

The 5-year notes and the 10-year notes are issued at a fixed interest rate. The fair values of these notes are based on listed market prices and are classified within Level 1 of the fair value hierarchy. The fair value of the remaining borrowings approximates their carrying amount, determined using the discounted cash flow method using market related interest rates and are classified within Level 3 of the fair value hierarchy.

Loan advanced – contractor

The fair value of the contractor loan approximates its carrying amount, determined using the discounted cash flow method and market related interest rates and is classified within Level 3 of the fair value hierarchy.


17. Capital commitments

  United States Dollars
Figures in millions unless otherwise stated June 2022  (Reviewed) Dec 2021  (Audited)
Commitments    
Capital expenditure    
Contracted for1               183.3                251.9 
1 Contracted for capital expenditure includes US$114.0m (2021: US$193.3m) for Salares Norte.