Gold Fields Ltd ADR 2026 H1 Earnings Call

Good day, everybody, and thank you for joining us for the presentation of Gold Fields results for the six months to 30th of June 2026. My name is Mike Fraser, and joining today in our Johannesburg office is Alex Dall, our Chief Financial Officer, and Jongisa Magagula, our EVP of external affairs. Today our message is very simple. Our operations delivered a solid first half performance. We converted this in conjunction with a higher and supportive gold market into very strong cash flows, and that in turn allowed us to deliver higher returns to our shareholders. I wanted to just bring your attention to the forward-looking statements, which include some non-IFRS measures, and I ask you to take notes of the slide on page 2. In terms of the agenda for today, I will cover the highlights and the operational performance.

Alex will cover the financials and capital allocation and also touch on some of the transformation initiatives underway to create a more reliable and agile organization. Finally, I'll close on growth, strategy, and the outlook before we open for questions. Turning to the highlights of the first half. Firstly, we had a strong half, and most importantly, we had no fatalities and no serious injuries across the group. This is a real manifestation of the fact that our safety improvement program that we launched in 2024 is really gaining momentum and delivering encouraging results across our business. We were also able to deliver a 12% increase in attributable production to 1.267 million ounces. This was firstly led by Salares Norte, which really delivered 173% increase on the equivalent period, which was extremely strong performance, as well as strong delivery from Gruyere.

Importantly, South Deep also continued to demonstrate productivity improvements in the underground and delivered 151,000 ounces in line with its plan. This was supported by improved destress mining, improved development, as well as improved stope turnover. Our sales volumes in the six months was 18% higher, and our average realized gold price was 51% higher at $4,678. This drove adjusted free cash flow of $2.225 billion, more than double the prior period. This translates into a free cash flow yield of 11%. Our cash costs rose 10%, and all-in sustaining costs were up 13% to $1,893 an ounce. This was mainly driven by external factors including royalties, stronger producing currencies, and inflation. The cash costs reflected the high discretionary capital that we flagged at our capital markets day in November. Alex will unpack the movements in costs a little bit further when he presents.

Just moving to our transformation program, we acknowledge that we can't stand still, and so our transformation program is really driving a focus on productivity, improving efficiencies, cost-competitiveness, and organizational resilience and simplicity. We believe that this focus on the transformation will really ultimately transform into more sustainable and improved performance over time. When turning to cash generation, we wanted to make it very clear that we are translating the strongest cash generation into benefits to our shareholders. We have paid out 50% of our operating cash flow in the six months, with an interim base dividend of R16.25 per share, which is up 132% year-on-year. In addition, we have completed $300 million of buybacks that were completed between the period of March to July.

In terms of our top-up shareholder returns program, today we also announced an additional $500 million that was allocated to our top-up program, which takes the total program to $1.25 billion that have been allocated since we first announced this in November of 2025. As we said, the top-up program will be assessed every 6 months as cash is generated. Today, we've delivered $553 million of the $1.25 billion, $253 million in a special dividend that was allocated in February, and $300 million in buybacks. Our net debt to EBITDA finished at 0.06 times at the end of June, down 0.37 times a year ago. We continue to invest in the business. Windfall is one of the highest-grade ore bodies in Canada and our next growth frontier, and I'll talk a little bit about that later.

An important milestone was achieved with the signing of the IBA, and we've also progressed detailed engineering and execution readiness to de-risk this project. Our portfolio optimization also continues. We've completed the Damang exit and have completed $182 million of non-core disposals in the half. In the first half, we strengthened our financial capacity. Our production is tracking towards the upper end of our guidance. Our all-in sustaining costs and all-in costs are expected towards the mid and lower end of their guidance ranges. Our operating delivery is translating into cash, balance sheet strength, and capacity to fund growth, as well as returning cash to shareholders. I now turn on to our operational performance, starting with safety. Importantly, as I mentioned earlier, we had no fatalities or serious injuries in the first half. This is a real manifestation of the discipline of our teams in achieving these outcomes.

This is a combination of visible felt leadership, critical risk identification, and critical control verification, focusing on a disciplined planning of work and embedding the right behaviors in the execution of work. We continue to track hazard and near-miss reporting with enterprise-wide learning from our incidents. Our focus is now extending from the lagging indicators to the quality of critical control verification and focus on the leading indicators. We are also focusing on psychological safety and creating a safe operating culture within our safety improvement program, ensuring that everyone goes home safe and well every day. Just moving on to our operating performance. As I mentioned earlier, we delivered 1.25 million ounces of attributable production, and with total cash costs up around 10%, all-in costs up 9% as we had slightly lower capital costs coming out of Windfall and capital expenditure in total up 6%.

Our production and costs on track to meet annual guidance. Salares Norte, as I mentioned, was at a standout performance now at a steady state. Granny Smith produced 147,000 ounces, up 10%, with higher mined grades and improved underground productivity, and South Deep delivered in line with plan due to improved destress rates and shortened stope turnaround times. Despite a slight reduction in grade, the mine produced more ounces on a managed basis in the period. Moving on to our production profile, and this just shows the bridge of higher output and improved quality mix led by low-cost ounces from Salares. Cerro Corona was in line with plan, and lower year-on-year as we now transition to stockpile processing. As Salares achieved steady state, they achieved 173% higher production, with plant operating successfully throughout the winter conditions that we had similar to prior years.

This reinforces the capability of that operation and the team in delivering through some extreme conditions. Tarkwa is slightly lower year-on-year as we realize lower mill feed grades, as we process more stockpile and moved more waste material than ore during the six months. We also had some adverse weather conditions affecting load haul and drilling in the period. We are seeing improved performance in the second quarter and expect to see a step change in the second half of the calendar year. South Deep is performing in line with plan and continue to see strong underground performance. Agnew was impacted by the seismic event that we experienced in the beginning of 2026, and we are seeing encouraging signs of the recovery, which we expect to continue in H2. Just moving on to all-in sustaining costs.

As I mentioned, our all-in sustaining cost was at $1,893 an ounce, impacted by slightly higher strip ratios across some of our assets and structural cost impacts of mining at depth. We did have some uncontrollable factors which Alex will talk to, including higher royalties, some inflationary impacts, and they're offset by the impact of byproduct credits, particularly at Salares Norte. We have seen a change in the cost base, with Salares Norte now moving to commercial level of production and Gruyere now consolidated at 100% rather than 50%. There were some impacts on mining cost inflation at Gruyere and Tarkwa in particular, and Alex again will cover that.

What we are seeing is higher volumes, better recoveries, and focus on value-driven spend, again, which Alex will unpack as part of our transformation journey on decarbonization with the St. Ives Renewable Energy project due to come on stream at the second half of this year. A very key focus on water and where we have achieved 93% recycling of water across our assets. I now hand over to Alex to talk through the financial outcomes.

Thank you, Mike. I'll cover, as Mike said, the financial performance, capital allocation and transformation program. H1 2026 was a very strong six months for Gold Fields, with headline earnings per share, and free cash flow all more than doubling. As Mike has mentioned earlier, the key drivers were higher production and a stronger gold price. Sales volumes were up 18% and the gold price up circa 50%, which supported a step change in our earnings and our cash generation. Adjusted free cash flow increased to $2.2 billion, while net debt reduced to $437 million, significantly strengthening the flexibility on our balance sheet. Pleasingly for me, excluding lease liabilities, we ended the half in a net cash position. Importantly, this performance does give funding future delivery, top quartile shareholder returns as per our commitment.

This slide bridges our efforts cost of sales to our all-in costs and highlights the strength of the underlying cost base. It is important to highlight that both cost of sales and depreciation have increased materially year on year. This is primarily due to the consolidation of Gruyere and the fixed asset adjustment came with the acquisition that have impacted us. In October each year, cash costs was $1,893 an ounce. We believe this represents highly competitive underlying cash and provides asset. Contractors, labor, consumables, and maintenance do make up the majority of our cost base, but this represents our biggest opportunity to improve our competitiveness through this transformation program, through reducing costs by reducing consumption and buying cheaper. These are the areas that this program is going to focus on.

Sustaining capital of $497 an ounce, which is in line with what was communicated as part of our capital markets day, reflects a targeted reinvestment into our asset base, including waste stripping, underground development, and the enabling infrastructure to support that production. Included in our sustaining capital leases and other items, our all-in sustaining cost was $1,893. From there, we step up to our all-in cost of $2,125. This is due to primarily growth capital expenditure at Australian operations and the exploration expenditure relates to Windfall. We do believe that we have a competitive cash cost base that enables us to invest in our assets, fund our future growth, and deliver those shareholder returns. We will now move on to capital allocation. Our capital allocation framework remains unchanged, and we continue to balance the tension between returns, growth, and financial strength.