Gold Fields sees earnings double the back of the booming gold price

Jack Vearey/ Getty

One of the world's largest gold mining company Gold Fields [JSE: GFI] sees earnings nearly doubling due to the increasing price of gold.

The group on Wednesday issued a trading update for the six months ended 30 June 2020.

Basic earnings per share are expected to nearly double to between 294.81c and per share and 325.84c, compared to the previous year. 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 Thursday 20 August.

ZAR/USD
16.87
(+0.64)
ZAR/GBP
21.71
(+0.91)
ZAR/EUR
19.83
(+0.24)
ZAR/AUD
12.05
(+0.22)
ZAR/JPY
0.16
(+1.02)
Gold
1895.90
(+0.75)
Silver
24.31
(+2.42)
Platinum
886.56
(+0.92)
Brent Crude
42.88
(+1.08)
Palladium
2314.50
(+2.75)
All Share
54506.88
(-0.39)
Top 40
50319.94
(-0.51)
Financial 15
10003.88
(+0.72)
Industrial 25
73358.17
(-0.86)
Resource 10
54053.58
(-0.58)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes. We need the money.
11% - 1387 votes
It depends on how the funds are used.
73% - 8982 votes
No. We should have gotten the loan elsewhere.
16% - 1984 votes
Vote