Gold Fields Limited (ADR) (NYSE:GFI) Struggles To Put Hard Year Behind It


Dallas, Texas 12/31/2013 (FINANCIALSTRENDS) – Gold Fields Limited (ADR) (NYSE:GFI) has been one of the South African gold mining firms which have been deeply impacted by the global slowdown in the demand for gold. Due to the drop in price of gold in the international markets, the company has been forced to face a big drop in its cash flow. It has also been affected by disruption in its operations due to labour unrest seeking higher wages. In order to sustain the situation and overcome the short term losses, the firm has been forced to take up cost cutting measures. These recurring issues have in turn put a lot of pressure on its operations.

Operational Background

Gold Fields Limited (ADR) (NYSE:GFI) is a South African gold mining firm which has its HQ in Johannesburg. It has a market cap of $2.29 billion and had raised funds from the U.S share market by issuing American depository receipts. Its operations consist of exploration and extraction of gold from its mining reserves spread across the South American and Australasian continents. It boasts of owning gold mines in “South Africa, Ghana, Australia and Peru”. In addition to Gold, the firm is also involved in mining and extracting copper and platinum to a small extent in some of its properties.


FY 13 Operational Performance

From these mining operations, Gold Fields Limited (ADR) (NYSE:GFI) had managed to garner sales of $3.26 billion over the trailing 12 months and generated net income of $60.8 million in the same period. It has also provided its share holders with dividend payouts of $0.14 for the past year and this translates to a 4.5 percent dividend payout yield in the same period.

But over the past few quarters, Gold Fields Limited (ADR) (NYSE:GFI) has been impacted by the general downturn that the gold sector has been going through on and off over the past one year. Thanks to this erratic demand and supply vagaries which was in turn primarily driven by some of the lowest price points for gold in the international over the past few years, the firm had recorded a 22.6 percent dip in quarter on quarter sales in the most recent quarter for which results were announced in November. It also announced earnings per share dip of 221 percent on a quarter on quarter compare for the same quarter.

Stock Market Performance

These pricing pressures on its staple produce has deeply impacted Gold Fields Limited (ADR) (NYSE:GFI) profitability. Hence Gold Fields Limited (ADR) (NYSE:GFI) stock has been struggling to


inhabit the green territory for the past one year. It has shed almost 70 percent of its market value during trading in the past one year and this loss has extended well into the short-term where in the past month itself, the stock has lost close to 22 percent of its market value. When trading was stopped for December 30, the stock was trading at $3.11 per share. This price point was 1.89 percent below its prior day close. More importantly, at these depreciated price points, the stock of this gold mining firm is trading just 6.5 percent below its past 52 week low price points. In the past year, the low price point had gone down to a low of $2.29 per share.

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