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Johannesburg - Bullion producer Gold Fields [JSE:GFI] reported a decline in fourth quarter earnings on Thursday on the back of softer global gold prices.
Normalised earnings per share dropped to 2 US cents per share in the three months to end-December, compared to 3 US cents in the previous quarter.
Gold Fields Limited announced on Thursday that operating activities generated a $54m (about R636m) cash flow in the quarter that ended December 2014, despite the seven percent lower average gold price.
"In 2014, the group generated cash flow from operating activities of $235m (about R2.77bn) despite the 10% decrease in the gold price during the year," Gold Fields CEO Nick Holland said in a statement.
"The robust international portfolio continues to perform well, underpinning the 2014 financial performance," he said.
Holland said in a statement that, in the past two years, the company had undergone a significant transformation that had positioned it to operate successfully in the current low gold price environment.
The strategy continued to deliver "sound results".
Gold Fields generated the cash flow from operating activities despite the 10% decrease in the gold price during the year.
"The robust international portfolio continues to perform well, underpinning the 2014 financial performance," said Holland.
"Unfortunately, South Deep remains challenging and the planned build-up for 2015 will not be achieved. However, we believe that 2014 was the low-point for the mine and expect consistent improvement through 2015 and beyond."
Holland said there were zero fatalities in the fourth quarter and a strong performance from international operations.
He said the balance sheet was further improved with an additional $45m (about R530bn) net debt reduction.
A final dividend of 20 cents a share was declared.
Holland said highlights for the 2014 financial year included a 10% increase in attributable production to 2.2 million ounces.
A number of issues that arose during 2014 at the South Deep mine showed the numerous challenges facing the mine.
These included the ground support remediation programme and a skills deficit in mechanised mining practices.
"In view of these issues, Gold Fields has decided to take a step back to get the basics right and set the foundation to unlock the long-term value inherent in the asset," said Holland.
"Management retains full confidence in the ore body and the world-class infrastructure in place to successfully exploit this ore body."
He said many of the problems faced by the mine were related to the shortage of mechanised mining skills in South Africa and competition with other players for these limited skills.
Holland said that with the rolling blackouts implemented by Eskom, South Deep had elected to be on a load curtailment schedule and would not be subjected to load shedding.
The Ghanaian mines had been affected by rolling blackouts of up to 25%. These disruptions had been accommodated through the use of standby Gensets, he said.
