Gold Fields Ld - Quarter Results
04 Mai 2000 - 9:02AM
UK Regulatory
RNS Number:9771J
Gold Fields Ld
4 May 2000
Gold Fields Limited: March 2000 Quarterly Results
Gold Fields Limited
March 2000 Quarterly Results 1 January 2000 to 31 March 2000
Highlights
* 20% increase in earnings
* Cost containment continues
* Strong financial position
South African Rands United States Dollars
SALIENT FEATURES
Quarter Quarter
December March March December
1999 2000 2000 1999
30 794 29 818 kg Gold production * oz(000) 959 990
43 210 44 001 R/kg Cash costs* $/oz 217 220
5 314 5 520 000 Tons milled 000 5,520 5,314
58 337 58 911 R/kg Revenue $/oz 291 296
45 241 46 634 R/kg Operating costs $/oz 230 230
268 257 R/ton Operating costs $/ton 41 44
400 377 Rm Operating profit $m 60 65
Earnings before
exceptional items
213 235 Rm - net of taxation $m 37 35
47 52 SA c.p.s. US c.p.s. 8 8
192 232 Rm Net earnings $m 37 32
43 51 SA c.p.s. US c.p.s. 8 7
* Attributable - All Companies wholly-owned except for Tarkwa (71.1%).
International Accounting Standards Basis:
All figures are in millions unless otherwise stated.
INCOME STATEMENTS
South African Rands
Nine Months to Quarter
March March March December March
1999 2000 1999 1999 2000
4 126.9 5 261.0 1 582.4 1 818.8 1 793.4 Revenue
4 093.0 5 182.0 1 566.7 1 816.0 1 793.4 Spot sales
33.9 79.0 15.7 2.8 - Hedging profit
3 038.4 4 279.2 1 234.9 1 419.0 1 416.1 Operating cost
1 088.5 981.8 347.5 399.8 377.3 Operating profit
(33.6) (35.6) (26.6) (8.7) (13.7) Gold inventory change
231.3 490.4 95.6 160.0 158.2 Amortisation and depreciation
890.8 527.0 278.5 248.5 232.8 Net operating profit
191.5 70.0 94.3 17.6 35.9 Other income
(64.4) (46.4) (21.2) (10.6) (22.7) Business development
Profit before tax and
1 017.9 550.6 351.6 255.5 246.0 exceptional items
364.9 (162.1) 383.3 (25.4) (5.8) Exceptional gain/(loss)
1 382.8 388.5 734.9 230.1 240.2 Profit before taxation
234.6 69.9 112.1 20.3 4.4 Mining and income taxation
205.7 100.3 101.2 25.4 26.5 Normal taxation
28.9 (30.4) 10.9 (5.1) (22.1) Deferred taxation
1 148.2 318.6 622.8 209.8 235.8 Profit after taxation
5.2 (17.7) 7.4 17.4 3.9 Minority interest
1 143.0 336.3 615.4 192.4 231.9 Net earnings
Net earnings per
383 75 137 43 51 share (cents)
Earnings before
exceptional items
745.8 436.2 235.6 212.5 235.2 - net of taxation
Earnings per share (cents)
before exceptional items
250 97 53 47 52 - net of taxation
EXCEPTIONAL ITEMS
(66.5) (94.4) (26.7) (21.3) (7.1) Retrenchment costs
- (66.3) - - - Hedge buy back costs
Deferred taxation -
379.8 - 375.5 - - decrease in rate
51.6 (1.4) 34.5 (4.1) 1.3 Other
364.9 (162.1) 383.3 (25.4) (5.8) Exceptional gain/(loss)
Rand/US$ conversion rate
United States Dollars
Quarter Nine Months to
March December March March March
2000 1999 1999 2000 1999
Revenue 284.7 297.2 259.3 852.7 684.4
Spot sales 284.7 296.7 256.7 839.9 678.8
Hedging profit - 0.5 2.6 12.8 5.6
Operating cost 224.8 231.9 202.3 693.5 503.9
Operating profit 59.9 65.3 57.0 159.2 180.5
Gold inventory change (2.2) (1.4) (4.4) (5.8) (5.6)
Amortisation and depreciation 25.1 26.1 15.7 79.5 38.4
Net operating profit 37.0 40.6 45.7 85.5 147.7
Other income 5.7 2.9 15.5 11.3 31.8
Business development (3.6) (1.7) (3.5) (7.5) (10.7)
Profit before tax and
exceptional items 39.1 41.8 57.7 89.3 168.8
Exceptional gain/(loss) (0.9) (4.1) 62.8 (26.3) 60.5
Profit before taxation 38.2 37.7 120.5 63.0 229.3
Mining and income taxation 0.7 3.4 18.4 11.4 38.9
Normal taxation 4.2 4.2 16.6 16.3 34.1
Deferred taxation (3.5) (0.8) 1.8 (4.9) 4.8
Profit after taxation 37.5 34.3 102.1 51.6 190.4
Minority interest 0.6 2.8 1.2 (2.9) 0.9
Net earnings 36.9 31.5 100.9 54.5 189.5
Net earnings per
share (cents) 8 7 23 12 64
Earnings before
exceptional items
- net of taxation 37.4 34.7 38.7 70.7 123.6
Earnings per share (cents)
before exceptional items
- net of taxation 8 8 9 16 41
EXCEPTIONAL ITEMS
Retrenchment costs (1.1) (3.5) (4.4) (15.3) (11.0)
Hedge buy back costs - - - (10.7) -
Deferred taxation -
decrease in rate - - 61.5 - 63.0
Other 0.2 (0.6) 5.7 (0.3) 8.5
Exceptional gain/(loss) (0.9) (4.1) 62.8 (26.3) 60.5
Rand/US$ conversion rate 6.30 6.12 6.10 6.17 6.03
*In reviewing the quarterly and year to date results against the comparative
periods, the following needs to be taken into account:
The results relating to Oryx were capitalised up to 30 June 1999;
Driefontein was proportionally accounted for (38%) to December 1998,
since then 100%; and the Tarkwa surface operation was in a build-up stage.
BALANCE SHEETS
South African Rands
June March
1999 2000
7 504.0 7 957.2 Shareholders equity
235.7 188.3 Outside shareholders interest
3 689.2 3 659.2 Deferred taxation
99.1 196.5 Long-term loans
409.9 409.5 Long-term provisions
11 937.9 12 410.7
Represented by:
12 158.5 12 347.6 Mining and mineral assets
180.4 178.0 Investments
(401.0) (114.9) Working capital
255.5 400.3 Cash and deposits
592.1 592.4 Other current assets
(1 176.3) (1 107.6) Current liabilities
(72.3) - Short-term loan
11 937.9 12 410.7 Net assets
Rand/US$ conversion rate
United States Dollars
March June
2000 1999
Shareholders equity 1,214.8 1,240.3
Outside shareholders interest 28.7 39.0
Deferred taxation 558.7 609.8
Long-term loans 30.0 16.4
Long-term provisions 62.5 67.8
1,894.7 1,973.3
Represented by:
Mining and mineral assets 1,885.1 2,009.7
Investments 27.2 29.8
Working capital (17.6) (66.2)
Cash and deposits 61.1 42.4
Other current assets 90.4 97.9
Current liabilities (169.1) (194.5)
Short-term loan - (12.0)
Net assets 1,894.7 1,973.3
Rand/US$ conversion rate 6.55 6.14
CASH FLOW STATEMENTS
South African Rands
Nine Months to Quarter
March March December March
1999 2000 1999 2000
Cash flow from
921.4 854.4 349.1 327.3 operating activities
Profit before tax and
1 017.9 550.6 255.5 246.0 exceptional items
364.9 (162.1) (25.4) (5.8) Exceptional gains/(loss)
231.3 490.4 160.0 158.2 Amortisation and depreciation
(106.3) 81.5 8.2 (25.7) Change in working capital
(84.3) (123.0) (49.6) (69.7) Taxation paid
(502.1) 17.0 0.4 24.3 Other
(123.0) (225.2) (134.5) (90.7) Dividends paid
Cash utilised in investing
395.1 (504.1) (170.6) (157.4) activities
(720.6) (506.5) (169.6) (156.5) Capital expenditure - net
(Purchase)/disposal of
1 115.7 2.4 (1.0) (0.9) investments - net
Cash flow from
(316.9) 19.7 (27.4) (73.6) financing activities
876.6 144.8 16.6 5.6 Net cash inflow
- - - - Translation adjustment
605.9 255.5 378.1 394.7 Cash at beginning of period
1 482.5 400.3 394.7 400.3 Cash at end of period
United States Dollars
Quarter Nine Months to
March December March March
2000 1999 2000 1999
Cash flow from
operating activities 52.5 56.9 138.4 152.8
Profit before tax and
exceptional items 39.1 41.8 89.3 168.8
Exceptional gains/(loss) (0.9) (4.1) (26.3) 60.5
Amortisation and depreciation 25.1 26.1 79.5 38.4
Change in working capital (3.9) 1.3 13.6 (17.6)
Taxation paid (10.6) (8.1) (20.5) (14.0)
Other 3.7 (0.1) 2.8 (83.3)
Dividends paid (13.8) (21.9) (37.5) (20.4)
Cash utilised in investing
activities (24.0) (27.8) (84.0) 65.5
Capital expenditure - net (23.9) (27.6) (84.4) (119.5)
(Purchase)/disposal of
investments - net (0.1) (0.2) 0.4 185.0
Cash flow from
financing activities (11.2) (4.5) 3.3 (52.6)
Net cash inflow 3.5 2.7 20.2 145.3
Translation adjustment (6.7) (1.3) (1.5) (6.9)
Cash at beginning of period 64.3 62.9 42.4 102.3
Cash at end of period 61.1 64.3 61.1 240.7
Commentary
Financial
Net earnings for the quarter were R231.9 million, which is 20 per cent up
on that achieved in the previous quarter. Exceptional items of R5.8 million
relate mainly to retrenchment costs. Earnings before exceptional items
(net of taxation) for the quarter were R235.2 million compared with
R212.5 million in the previous quarter - an increase of eleven per cent.
Despite a three per cent drop in gold production quarter on quarter,
an improvement in earnings was achieved due to marginally higher gold prices
realised, continued cost containment and a reduced taxation charge.
Revenue was R25.4 million lower than the previous quarter due to the
impact of the lower gold production, partially offset by the higher
gold price received of R58 911 per kilogram (US$291 per ounce),
compared with a realised gold price of R58 337 per kilogram (US$296 per ounce)
in the previous quarter, associated with a weakening in the average
Rand/Dollar exchange rate from R6.12 / US$ in the December quarter to
R6.30 / US$ in the March quarter.
Operating costs for the quarter were R2.9 million lower than the previous
quarter despite a R16.7 million increase in costs at Tarkwa,
associated with an increase in ore milled. This is not yet reflected in
increased gold produced due to an increase in gold in process on the pads.
Costs at Driefontein were reduced quarter on quarter by some R18.4 million as
part of the continuing general cost saving drive across the group,
whilst other operations were able to maintain their costs at the same level
as reported in the previous quarter.
Other income in the quarter was significantly higher than the previous
quarter due to the receipt of dividend income of R21.6 million relating to
the three per cent holding in Western Areas.
Income tax for the quarter was R15.9 million lower than the previous quarter
due to a R40.6 million tax reversal relating to the beneficial tax ruling
from the South African Revenue Services - Oryx and Beatrix are regarded as
one entity for income tax purposes as from 1 July 1999 - partially offset
by the impact of moving out of the five per cent "tax tunnel" as specified in
the South African mining tax formula.
New Business expenditure doubled quarter on quarter due mainly to expenditure
incurred on the Cachoeira project in Brazil.
Cash at the end of the quarter was R400 million, this after having retired
the only remaining short-term corporate debt of R72.3 million and servicing
the interim dividend of R90.7 million.
The Group is thus in a strong financial position.
Operations
Attributable gold produced in the quarter was 959 000 ounces compared with
990 000 ounces in the previous quarter. Driefontein produced 365 600 ounces
of gold during the quarter which was marginally lower than the
previous quarter, and its operating results were bolstered by an increase in
surface output resulting from the recommissioning of the reclaim plant during
the quarter. Despite the reduction in gold produced at Driefontein, operating
profit for the quarter was R170.7 million compared to R157.5 million in the
previous quarter due to the cost reductions achieved.
Kloof Company was negatively impacted by lower production at both Leeudoorn
and Libanon compared to the previous quarter, which resulted in a reduction
in operating profit from R155.3 million in the previous quarter to
R134.0 million in the current quarter. The reduction in gold output at
Libanon is due largely to a lack of mining flexibility and the operating loss
of R30.4 million for the quarter is clearly not sustainable.
Management is investigating all options to ameliorate this situation as
a matter of urgency. Included in Kloof's results is an amount of 552 kilograms
from plant clean-up which, if excluded, would reduce the reported grade of
16.0 grams per ton to 14.7 grams per ton.
Oryx showed an encouraging improvement against the previous quarter,
whilst Tarkwa continues to perform ahead of plan.
Outlook
The group will continue to focus on key value drivers such as improving
productivity and cost performance, in particular cost per ton, as well as
increasing mining flexibility through additional development. It will however
take some time for these initiatives to bear fruit. The company has been
reviewing opportunities for investment in cost reduction. The most advanced
of these is the replacement of the two Driefontein metallurgical plants with
a single state of the art complex. Investigations are at an advanced stage on
this project which would cost approximately R400 million.
General
The unaudited results for the quarter have been prepared on the International
Accounting Standards basis. The detailed financial, operational and
developmental results for the March 2000 quarter are available on the
company's website (www.goldfields.co.za) or
can be requested from the company at (011) 644-2460.
Accounting policies
These consolidated quarterly condensed financial statements are prepared in
accordance with IAS 34 Interim Financial Reporting. The accounting policies
used in the preparation of the quarterly financial statements are consistent
with those used in the annual financial statements for the year ended
June 1999.
Chris Thompson
Chairman and Chief Executive Officer
Johannesburg
4 May 2000
END
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