Gold Fields sees earnings double on back of booming gold price
One of the world's largest gold mining company Gold Fields sees earnings nearly doubling due to the increasing price of gold. The group on Wednesday issued a trading update for the six months ended June 30, 2020.
Basic earnings per share are expected to nearly double to between 294.81c and per share and 325.84c, compared to 2019. Headline earnings per share are expected to increase nearly four times to 336.18c and 353.42c per share. "The increase in earnings for the period is driven largely by the increase in the gold price received," it said.
The commodity has increased more than 30% since a year ago. The market volatility brought on by the Covid-19 pandemic has contributed to investors flocking to it as a safe haven.
Gold production during the period has increased marginally, as increased production days and contributions from the newly opened Gruyere mine were offset by Covid-19 stoppages at South Deep and Cerro Corona mines. The lower copper price at Cerro Corona, resulted in lower gold equivalent ounces, the statement read.
The group's all-in sustaining costs, of which 2% are attributed to Covid-19, increased 11% year-on-year.
The increasing costs for the first half of the year have led the group to increase its cost guidance for the year, the group said potential further Covid-19 related disruptions would increase the risk to production and cost guidance.
Gold Fields is expected to release its half-year earnings on August 20.