Gold Fields, the worldâ€™s fourth-biggest gold producer, said on Friday output of the metal rose 4 percent in theÂ fourth quarter while costs fell, but it posted lower earnings due to a stronger rand.South African gold miners sellÂ their gold in dollars, and pay their costs in rand, which gained in the June quarter on increasing global demand forÂ risk and expected capital inflows.
Gold Fields, the No. 2 producer of the metal in Africa, said in a statement goldÂ production rose 4 per cent to 906,000 ounces and total cash costs fell 6 per cent to $512 per ounce.The companyÂ forecast production in the September quarter would match that of the June quarter, while total cash costs would jumpÂ 15 per cent to $590 per ounce mainly because of a new wage deal agreed last month and electricity tariff increasesÂ in South Africa, as well as a stronger rand/dollar exchange rate.For the third quarter to the end of June, theÂ company said adjusted headline earnings per share came in at 140 South African cents, beating a market consensus ofÂ 121 cents, but were below the 204 cents posted in the third quarter to end March.â€As a consequence of the strongerÂ rand, our operating margin decreased from 47 per cent to 43 per cent,â€ Nick Holland, Gold Fieldsâ€™ chief executiveÂ officer said.
Headline earnings are the key profit measure in South Africa, stripping out capital, non-trading and someÂ extraordinary items. Gold Fields earnings are adjusted to exclude the effects of financial instruments and foreignÂ debt.Gold Fields said it would pay a final dividend of 80 South African cents, and a total dividend of 110 cents.Â The company paid a final dividend of 120 last year. The group said a recovery at its Beatrix and Tarkwa mines inÂ South Africa and Ghana respectively, as well as an improvement at its Cerro Corona mine in Peru had boost goldÂ production.