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Gold Fields (GFI) - 2024 Q2 - Earnings Call Transcript
GFIGold Fields (GFI)2024-08-23 21:05
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Financial Data and Key Metrics Changes - The company reported a 20% year-on-year decline in production, leading to a 22% decrease in normalized earnings to 355million[21][32]−Adjustedfreecashflowwassignificantlyimpacted,resultinginanoutflowof355 million [21][32] - Adjusted free cash flow was significantly impacted, resulting in an outflow of 58 million [21] - All-in cost increased to 2,060perounce,drivenbylowerproductionandhighercapitalexpenditures[21][32]BusinessLineDataandKeyMetricsChanges−Australianassetscontributedaroundhalfofthegroup′sproductionandcashflow,whileGhanaianoperationscontributedaboutathird[5]−Gruyeremine′sproductionwasaffectedbyheavyrains,leadingtoa622,060 per ounce, driven by lower production and higher capital expenditures [21][32] Business Line Data and Key Metrics Changes - Australian assets contributed around half of the group's production and cash flow, while Ghanaian operations contributed about a third [5] - Gruyere mine's production was affected by heavy rains, leading to a 62% increase in all-in cost to AUD2,676 per ounce [9] - St Ives gold production decreased by 25% to 139,000 ounces, with all-in costs expected to be AUD2,900 [11] - South Deep's production decreased by 25% to 117,000 ounces, with all-in costs rising by 41% [12] Market Data and Key Metrics Changes - The company downgraded its 2024 production guidance to between 2.05 million ounces and 2.15 million ounces, a reduction of 150,000 ounces from previous guidance [8][32] - The higher gold price helped offset the decline in production, allowing for 320 million in adjusted free cash flow from operations [7] Company Strategy and Development Direction - The company aims to become a safe, reliable, and cost-effective producer, focusing on high-quality assets like St Ives, South Deep, Tarkwa/Iduapriem JV, and Windfall [24][25] - The acquisition of Osisko Mining consolidates 100% ownership of the Windfall project, which is expected to be a significant contributor to cash flows [28][30] - The company is pursuing bolt-on M&A and exploration opportunities while balancing returns to shareholders [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a stronger second half of 2024, particularly from South Deep, Tarkwa, Gruyere, St Ives, and Cerro Corona [7][32] - The ramp-up of Salares Norte has been delayed due to severe winter weather, impacting production expectations [18][20] - Management emphasized the importance of improving safety performance and implementing findings from an independent safety review [6][33] Other Important Information - The company reported two fatalities in the first half of 2024, highlighting the need for improved safety measures [2][6] - A dividend of ZAR0.300 was announced, representing a payout ratio of 40% of normalized earnings [21] Q&A Session Summary - No specific questions or answers were documented in the provided content, indicating the end of the presentation and Q&A session [35]