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Gold Fields Profit Drops 36% on Asset Sales, Output (Update1)

By Ron Derby

May 9 (Bloomberg) -- Gold Fields Ltd., Africa's second- biggest gold producer, said third-quarter profit fell 36 percent after gains from the sale of assets in the previous three months weren't repeated and output declined following power cuts.

Net income dropped to 1.25 billion rand ($160 million), or 1.78 rand a share, in the three months to March 31, from 1.94 billion rand, or 2.77 rand, the previous quarter, the Johannesburg-based company said today in a statement.

Most mines in South Africa were shut for five days from Jan. 25 and rationed afterwards to prevent state-run Eskom Holdings Ltd.'s power network from collapsing. Gold Fields' production plunged 14 percent to 827,000 ounces because of the disruptions and fatal accidents at its Beatrix and Kloof mines.

``The group should benefit over the next three quarters as production in South Africa normalizes at stable power supply,'' Gold Fields Chief Executive Officer Nick Holland said in the statement.

Gold Fields gained 2.13 rand, or 2 percent, to 106.80 rand as of 9:05 a.m. in Johannesburg trading, valuing the company at 69.3 billion rand. AngloGold Ashanti Ltd., Africa's biggest producer, climbed 2.5 percent to 302.35 rand.

Lower output offset a 17 percent gain in the average price of gold during the quarter. The precious metal climbed to a record $1,032.70 an ounce on March 17.

Gold Fields sold the Essakane deposit in Burkina Faso for a profit of 1.39 billion rand in the previous quarter, while the sale of the Choco 10 mine in Venezuela contributed 74 million rand.