Gold Fields (US:GFI)2023-02-22 16:00Financial Performance - Gold Fields reported a profit attributable to owners of the parent for the year ended 31 December 2022 of US$711 million (US$0.80 per share), a decrease of 10% compared to US$789 million (US$0.89 per share) in 2021[7]. - Profit for the period decreased by 13% from US$830m in 2021 to US$722m in 2022[102]. - Net profit attributable to owners decreased by 10% from US$789m or US$0.89 per share in 2021 to US$711m or US$0.80 per share in 2022[102]. - Headline earnings attributable to owners increased by 19% from US$890m or US$1.00 per share in 2021 to US$1,061m or US$1.19 per share in 2022[102]. - Revenue increased by 2% from US$4,195 million in 2021 to US$4,287 million in 2022 due to higher gold sold[84]. Production and Costs - Attributable gold equivalent production for 2022 was 2.399 million ounces, a 3% increase year-over-year, exceeding the guidance range of 2.310 million ounces to 2.360 million ounces[14]. - The all-in sustaining cost (AISC) for 2022 was US$1,105 per ounce, lower than the guidance range of US$1,140 to US$1,180 per ounce, primarily due to weaker exchange rates[14]. - Gold production increased by 12% to 10,200kg (327,900oz) in 2022 from 9,102kg (292,600oz) in 2021, attributed to improved efficiencies[139]. - Total all-in cost increased by 2% from US$1,297/oz in 2021 to US$1,320/oz in 2022, influenced by higher costs before amortization and depreciation[134]. - Cost of sales before amortisation and depreciation increased by 6% from US$1,662 million in 2021 to US$1,763 million in 2022, primarily due to inflationary pressures[85]. Cash Flow and Debt - Cash inflow from operating activities increased by 7% from US$1,599m in 2021 to US$1,714m in 2022[106]. - Adjusted free cash flow decreased by 7% from US$463m in 2021 to US$431m in 2022 due to lower cash generated by operations[123]. - The company ended 2022 with net debt of US$704 million, resulting in a net debt to EBITDA ratio of 0.29x, down from US$969 million and 0.40x at the end of 2021[10]. - Net debt decreased by 27% from US$969m at 31 December 2021 to US$704m at 31 December 2022, with net debt excluding lease liabilities decreasing by 44%[128]. Dividends and Shareholder Returns - Gold Fields declared a total dividend of 745 SA cents per share for the year, representing a payout ratio of 47% of normalized earnings[10]. - Dividends paid decreased by 9% from US$369m in 2021 to US$335m in 2022[107]. Capital Expenditure - Total capex for the Group in 2023 is expected to be between US$1.110bn - US$1.170bn, with sustaining capital between US$820m - US$850m[45]. - Non-sustaining capex for 2023 is expected to be between US$290m and US$320m, with the largest component being Salares Norte project capital of US$230m[46]. - Capital expenditure decreased by 2% from US$1,089m in 2021 to US$1,069m in 2022[109]. Environmental and Social Responsibility - The company is on track to achieve its 2030 ESG targets, including a 30% reduction in net carbon emissions, with renewable energy projects contributing to 13% of total electricity consumption in 2022[19]. - Host community procurement spend was US$747 million in 2022, representing 31% of total procurement, consistent with 2021[72]. - Gold Fields aims for 30% of total value creation to be delivered to host communities by 2030, up from 27% in 2022[72]. Operational Highlights - The Australian operations produced 1,061,000 ounces in 2022, a 4% increase from 1,019,000 ounces in 2021, generating adjusted free cash flow of US$431 million[22]. - South Deep's gold production increased by 12% to 10,200 kg (328,000 ounces) in 2022, with adjusted free cash flow rising by 47% to R2.1 billion (US$129 million)[24]. - Total managed production in Ghana decreased by 4% to 838koz in 2022 from 871koz in 2021, with all-in costs increasing by 10% to US$1,220/oz[26]. Impairments and Non-Recurring Expenses - Gold Fields recognized several impairments at year-end due to increased discount rates and inflationary cost pressures, with significant impairments at Tarkwa and Cerro Corona[17]. - Non-recurring expenses increased by 175% from US$89 million in 2021 to US$245 million in 2022, including a US$325 million impairment of the Tarkwa cash-generating unit[98]. Future Outlook - Gold Fields expects production from Salares Norte to begin in Q4 2023, with average annual production projected at 500,000 ounces from 2024 to 2029 at an AISC of US$660 per ounce[11]. - Attributable gold equivalent production for 2023 (excluding Asanko) is expected to be between 2.25Moz - 2.30Moz, compared to 2.32Moz in 2022[44].