COMMENTARY H1 2024 operating performance

Income statement

Revenue

Revenue decreased by 6% from US$2,266m for the six months ended 30 June 2023 to US$2,124m for the six months ended 30 June 2024 due to the 20% lower gold-equivalent ounces sold partially offset by the 15% higher gold price received.

Gold-equivalent ounces sold decreased by 20% from 1.207Moz to 0.961Moz. Refer Review of Operations for breakdown per asset.

The average US Dollar gold price achieved by the Group increased by 15% from US$1,927/eq oz for the six months ended 30 June 2023 to US$2,211/eq oz for the six months ended 30 June 2024. The average Australian/US Dollar exchange rate weakened by 3% from A$1.00 = US$0.68 for the six months ended 30 June 2023 to A$1.00 = US$0.66 for the six months ended 30 June 2024. The average US Dollar/Rand exchange rate weakened by 3% from R18.21 for the six months ended 30 June 2023 to R18.72 for the six months ended 30 June 2024.

Cost of sales before amortisation and depreciation

Cost of sales before amortisation and depreciation increased by 15% from US$939m for the six months ended 30 June 2023 to US$1,076m for the six months ended 30 June 2024 mainly due to a GIP credit of US$74m in the six months ended 30 June 2023 compared to a GIP charge of US$51m in the six months ended 30 June 2024.

Amortisation and depreciation

Amortisation and depreciation for the Group decreased by 37% from US$424m for the six months ended 30 June 2023 to US$269m for the six months ended 30 June 2024 mainly due to lower ounces mined at Tarkwa, Damang and Cerro Corona for the six months ended 30 June 2024.

Investment income

Investment income remained similar at US$13m for the six months ended 30 June 2024.

Finance expense

Finance expense for the Group decreased by 36% from US$33m for the six months ended 30 June 2023 to US$21m for the six months ended 30 June 2024 due to higher interest capitalised during the six months ended 30 June 2024. Interest expense on borrowings of US$45m, interest on lease liability of US$12m and rehabilitation interest of US$12m, partially offset by interest capitalised of US$48m for the six months ended 30 June 2024 compared with interest expense on borrowings of US$40m, interest on lease liability of US$11m, rehabilitation interest of US$11m and silicosis unwinding interest of US$1m, partially offset by interest capitalised of US$30m for the six months ended 30 June 2023.

Share of results of equity-accounted investees after taxation

The share of results of equity-accounted investees' losses after taxation increased by 325% from US$8m for the six months ended June 2023 to US$34m for the six months ended 30 June 2024. The loss of US$34m for the six month ended 30 June 2024 comprises share of equity-accounted losses from Windfall of US$30m, Lunnon of US$3m and FSE of US$1m. The loss of US$8m for the six month ended 30 June 2023 comprises share of equity-accounted losses from Windfall of US$6m, Lunnon of US$1m and FSE of US$1m.

(Loss)/gain on foreign exchange

The gain on foreign exchange of US$5m for the six months ended 30 June 2023 compared to a loss of US$14m for six months ended 30 June 2024 and related to the conversion of offshore cash holdings into their functional currencies.

Share-based payments

Share-based payments for the Group decreased by 20% from US$5m for the six months ended 30 June 2023 to US$4m for the six months ended 30 June 2024 mainly due to lower forecast vesting percentages of share-based payments.

Long-term incentive plan

The long-term incentive plan expense decreased by 96% from US$24m for the six months ended 30 June 2023 to US$1m for the six months ended 30 June 2024 due to the current marked-to-market valuation of the plan reflecting forecast performance.

Other costs, net

Other costs for the Group decreased by 14% from US$21m for the six months ended 30 June 2023 to US$18m for the six months ended 30 June 2024. The decrease is mainly due to facility cancellation fees on unused portion of loan facility due to loan facility renewal in 2023.

Exploration expense

Exploration expense decreased by 16% from US$38m for the six months ended 30 June 2023 to US$32m for the six months ended 30 June 2023. The decrease is due to lower spend in Chile and Ghana.

Non-recurring items

Non-recurring expenses of US$2m for the six months ended 30 June 2023 compared to income of US$40m for the six months ended 30 June 2024.

The income of US$40m for the six months ended 30 June 2024 comprises:

• Profit on disposal of Rusoro of US$62m
• Fair value adjustment on disposal of Asanko of US$6m.

Partially offset mainly by:

• Gruyere rainfall event related costs of US$20m.

Non-recurring expenses of US$2m for the six months ended 30 June 2023 mainly comprises restructuring costs at Tarkwa.

Royalties

Government royalties for the Group remained similar at US$60m for the six months ended 30 June 2024 mainly due to higher royalties in Ghana as a result of higher royalty rate in line with the higher gold price offset by lower royalties at South Deep and Cerro Corona.

Mining and income taxation

The taxation charge for the Group decreased by 10% from US$275m for the six months ended 30 June 2023 to US$247m for the six months ended 30 June 2024 in line with the lower profit before taxation.

Profit for the period

Profit for the period decreased by 15% from US$475m for the six months ended 30 June 2023 to US$402m for the six months ended 30 June 2024.

Net profit attributable to owners of the parent for the Group decreased by 15% from US$458m or US$0.51 per share for the six months ended 30 June 2023 to US$389m or US$0.43 per share for the six months ended 30 June 2024.

Headline earnings attributable to owners of the parent for the Group decreased by 30% from US$458m or US$0.51 per share for the six months ended 30 June 2023 to US$321m or US$0.36 per share for the six months ended 30 June 2024.

Normalised profit for the Group decreased by 22% from US$454m or US$0.51 per share for the six months ended 30 June 2023 to US$355m or US$0.40 per share for the six months ended 30 June 2024.

Normalised profit

Normalised profit reconciliation for the Group is calculated as follows:

US$'m	June 2024	June 2023
Profit for the period attributable to owners of the parent	389.0	457.8
Non-recurring items	(39.8)	2.1
Tax effect of non-recurring items	(3.5)	(0.5)
Non-controlling interest effect of non-recurring items	–	(0.1)
Loss/(gain) on foreign exchange	13.9	(4.6)
Tax effect on foreign exchange	(3.1)	0.2
Non-controlling interest effect on foreign exchange*	(0.5)	(0.7)
South Deep deferred tax rate change	(0.8)	–
Normalised profit attributable to owners of the parent	355.2	454.2

Normalised profit is considered an important measure by Gold Fields of the profit realised by the Group in the ordinary course of operations. In addition, it forms the basis of the dividend pay-out policy. Normalised profit is defined as profit excluding gains and losses on foreign exchange, financial instruments and non-recurring items after taxation and non-controlling interest effect.

Statement of cash flow

Cash flow from operating activities

Cash inflow from operating activities decreased by 12% from US$735m for the six months ended 30 June 2023 to US$645 for the six months ended 30 June 2024. The decrease was mainly due to a lower profit before royalties and taxation and higher royalties and taxation paid partially offset by a positive change in working capital.

Dividends paid

Dividends paid decreased by 4% from US$223m for the six months ended 30 June 2023 to US$214m for the six months ended 30 June 2024. The dividend paid of US$214m for the six months ended 30 June 2024 comprised dividends paid to owners of the parent of US$199m related to the 2023 final dividend and dividends paid to non-controlling interest holders of US$15m. The dividend paid of US$223m for the six months ended 30 June 2023 comprised dividends paid to owners of the parent of US$215m related to the 2022 final dividend and dividends paid to non-controlling interest holders of US$8m.

Cash flow from investing activities

Cash outflow from investing activities decreased by 34% from US$773m for the six months ended 30 June 2023 to US$513m for the six months ended 30 June 2024.

Capital expenditure

Capital expenditure increased by 18% from US$508m for the six months ended 30 June 2023 to US$601m for the six months ended 30 June 2024. The capital expenditure of US$601m for the six months ended 30 June 2024 comprised of sustaining capital expenditure of US$388m and non-sustaining capital expenditure of US$213m. The capital expenditure of US$508m for the six months ended 30 June 2023 comprised of sustaining capital expenditure of US$340m and non-sustaining capital expenditure of US$168m. The increase in sustaining capital is mainly due to higher spend at Gruyere, St Ives and South Deep. The increase in non-sustaining capital is due to a higher spend at Salares Norte.

Purchase of investments

Purchase of investments increased by 54% from US$13m for the six months ended 30 June 2023 to US$20m for the six months ended 30 June 2024. The purchase of US$20m for the six months ended 30 June 2024 comprised purchases of bonds for the insurance captive of US$18m as well as purchases of Torq Resources shares of US$1m and Tesoro Gold shares of US$1m. The purchase of US$13m for the six months ended 30 June 2023 comprised purchases of bonds for the insurance captive of US$12m as well as a purchase of Hamelin Gold shares of US$1m.

Purchase of equity-accounted investee

Gold Fields entered into a partnership agreement with Osisko Mining Inc. to develop and mine the world class underground Windfall Project in Québec, Canada. Under the agreement, Gold Fields was required to contribute US$222m (C$300m) for its 50% stake in the joint venture. This payment was made in May 2023.

Windfall Project capital contributions

The Windfall Project capital contributions increased by 24% from US$34m in the six months ended 30 June 2023 to US$42m in the six months ended 30 June 2024.

Proceeds on disposal of investments

Proceeds on disposal of investments increased from US$2m in the six months ended 30 June 2023 to US$150m in the six months ended 30 June 2024. The proceeds of US$150m received in 2024 comprised proceeds from the disposal of Rusoro of US$62m, equity holding in Asanko of US$65m and insurance captive bonds of US$23m. The proceeds of US$2m in 2023 related to insurance captive bonds.

Contributions to environmental trust funds

Contributions remained similar at US$5m for the six months ended 30 June 2024. The contributions of US$5m for the six months to 30 June 2024 comprise US$4m by the Ghanaian region and US$1m by South Deep. In addition, US$13m was set aside for rehabilitation purposes in Australia. If added to the contributions to rehabilitation funds, the total environmental funds set aside for the six months ended 30 June 2024 were US$18m.

The contributions of US$5m for the six months to 30 June 2023 comprise US$4m by the Ghanaian region and US$1m by South Deep in South Africa. In addition, US$20m was set aside for rehabilitation purposes in Australia and Peru. If added to the contributions to rehabilitation funds, the total environmental funds set aside for the six months ended 30 June 2023 were US$25m.

Cash flow from financing activities

Net cash outflow from financing activities of US$35m for the six months ended 30 June 2024 compared to an inflow of US$159m for the six months ended 30 June 2023. The cash outflow for the six months ended 30 June 2024 related to repayments of US$727m on offshore loans and payment of principal lease liabilities of US$46m partially offset by draw-downs of US$738m on offshore loans. The cash inflow for the six months ended 30 June 2023 related to the draw-downs of US$469m on offshore loans, partially offset by loan repayments of US$274m and payment of principal lease liabilities of US$36m.

Net cash utilised

Net cash outflow for the Group increased by 16% from US$102m for the six months ended 30 June 2023 to US$118m for the six months ended 30 June 2024. After accounting for a negative translation adjustment of US$3m on non-US Dollar cash balances, the cash outflow for the six months ended 30 June 2024 was US$121m. The cash balance at 30 June 2024 of US$528m compared with US$651m at 30 June 2023.

Adjusted free cash flow

Adjusted free cash outflow of US$58m for the six months ended 30 June 2024 compared to an inflow of US$140m for the six months ended 30 June 2023 due to lower cash flows from operating activities, higher capital expenditure and higher Windfall capital contributions.

The US$58m adjusted free cash outflow for the six months ended 30 June 2024 comprised: US$321m free cash generated by the eight mining operations (after royalties, taxes, capital expenditure and environmental payments) less US$256m spend at Salares Norte (comprising US$230m in capex, US$10m in exploration and a US$16m investment in working capital and other) less US$36m of net non-mine interest paid, US$32m on non-mine based costs mainly due to working capital movements, capital contributions to Windfall joint venture of US$42m and voluntary contributions to cash for environmental purposes in Australia of US$13m.

The US$140m adjusted free cash flow for the six months ended 30 June 2023 comprised: US$482m free cash generated by the eight mining operations (after royalties, taxes, capital expenditure and environmental payments) less US$202m spend at Salares Norte (comprising US$180m in capex, US$15m in exploration and a US$7m investment in working capital and other), less US$33m of net non-mine interest paid, US$54m on non-mine based costs mainly due to working capital movements, capital contributions to Windfall joint venture of US$34m and voluntary contributions to cash for environmental purposes in Australia and Peru of US$19m.

Adjusted free cash flow is calculated as follows:

	Six months ended
US$’m	June 2024	June 2023
Cash flows from operating activities	644.5	735.2
Capital expenditure – additions	(600.8)	(507.5)
Capital expenditure – working capital	2.8	4.7
Capital expenditure – Windfall capital contribution	(42.4)	(33.6)
Proceeds on disposal of property, plant and equipment	1.9	1.1
Environmental trust funds contributions	(4.9)	(5.0)
Contributions to secured cash deposit for	(12.6)	(19.2)
future rehabilitation purposes in Australia and Peru
Payment of lease liability	(46.3)	(35.5)
Adjusted free cash (outflow)/inflow	(57.8)	140.2

Adjusted free cash flow is calculated as cash flow from operating activities less net capital expenditure, environmental payments, lease payments and redemption of Asanko preference shares.

Statement of financial position

Net debt increased by 13% from US$1,024m at 31 December 2023 to US$1,153m at 30 June 2024.

Net debt excluding lease liabilities increased by 22% from US$588m at 31 December 2023 to US$720m at 30 June 2024.

Net debt is defined by the Group as total borrowings and lease liabilities less cash and cash equivalents.

Net debt/adjusted EBITDA

The net debt/adjusted EBITDA ratio of 0.53 at 30 June 2024 compared with 0.42 at 30 June 2023. The net debt/adjusted EBITDA ratio of 0.53 at 30 June 2024 is based on net debt of US$1,153m and adjusted EBITDA of US$2,158m.

The net debt/adjusted EBITDA ratio of 0.42 at 30 June 2023 is based on net debt of US$1,024m and adjusted EBITDA of US$2,424m.

Adjusted EBITDA

Adjusted EBITDA for calculating net debt/adjusted EBITDA is based on the profit for the 12 months ended 30 June 2024 and 30 June 2023 and is determined as follows in US$ million:

US$’m	June 2024
Revenue	4,358
Cost of sales before amortisation and depreciation	(2,088)
Exploration and project costs	(71)
Other costs*	(41)
	2,158

*	Other costs include other non-mine based costs.

Adjusted EBITDA is defined by the Group as profit or loss for the year adjusted for interest, taxation, amortisation and depreciation and certain other non-operating costs.

US$’m	June 2023
Revenue	4,318
Cost of sales before amortisation and depreciation	(1,780)
Exploration and project costs	(86)
Other costs*	(28)
	2,424

*	Other costs include other non-mine based costs.

Adjusted EBITDA is defined by the Group as profit or loss for the year adjusted for interest, taxation, amortisation and depreciation and certain other non-operating costs.

All-in sustaining and total all-in cost

Year-on-year

The Group AISC increased by 44% from US$1,213/oz for the six months ended 30 June 2023 to US$1,745/oz for the six months ended 30 June 2024 mainly due to lower gold sold, higher cost of sales before amortisations and depreciation and higher sustaining capital expenditure. The higher sustaining capital expenditure was mainly at Gruyere, St Ives and South Deep.

Total AIC increased by 47% from US$1,397/oz for the six months ended 30 June 2023 to US$2,060/oz for the six months ended 30 June 2024 mainly due to lower gold sold, higher cost of sales before amortisations and depreciation and higher sustaining and non-sustaining capital expenditure. The higher non-sustaining capital expenditure was mainly at Salares Norte and the Windfall Project. Salares Norte non-sustaining capital expenditure increased by 40% from US$123m for the six months ended 30 June 2023 to US$173m for the six months ended 30 June 2024 due to construction and completion activities as well as pre-commissioning and commissioning expenditures. Total capital expenditure at Salares Norte including both sustaining and non-sustaining capital expenditure increased by 28% from US$180m for the six months ended 30 June 2023 to US$230m for the six months ended 30 June 2024.