Kumba Iron Ore announced that Financial Director and CFO Frikkie Kotzee, who has held the position for the past five years, has decided to step down, in a presentation of its 2016 yearly results on Tuesday. This news came amid a pleasing set of results delivered by new CEO Themba Mkhwanazi.
A lawyer and a chartered accountant, Kotzee joined Kumba in 2012 and has worked in other parts of the Anglo group, as well as serving as a financial director of African Oxygen. He has vast experience of the financial services, mining and gas industries.
He said: "I would like to thank Kumba for what has been an excellent opportunity to serve as CFO. It has been very rewarding professionally and I have had the privilege of working with an exceptional board and management team. After five years and with a strengthened balance sheet and a major restructuring of the business successfully executed, I believe the time is right for me to step down."
Having indicated to the Kumba board that he intended to step down in December, he is set to remain with the company until 11 May, when its AGM will be held and after certain major strategic and financial deliverables will have been completed.
Kotzee was lauded by chairperson Fani Titi for his commitment to high standards of governance. Kumba will begin the search for his successor among both internal and external candidates shortly.
Africa's largest iron ore producer, Kumba almost doubled its 2015 earnings of $304 million with a $607 million showing in 2016, as a higher commodity price, cost-cutting initiatives had a positive effect on the bottom line. Headline earnings per share rose 131% to R27,30, as it had previously indicated to the market.
Mkhwanazi said: "It has been a successful year for Kumba, despite challenging and volatile iron ore markets. We acted quickly to restructure the business, reset the cost base and stabilise operating performance. In addition, we were awarded the residual Sishen mining right and settled our tax matter with SARS. We can now draw a line under these issues and focus on the business."
However, the board made the decision not to pay a dividend in the volatile conditions and use the cash to remain ungeared as major shareholder Anglo American looks to offload its asset in a portfolio restructuring that will see it concentrate its efforts on copper, diamonds and platinum. Anglo will announce its results next week.
Mkhwanazi announced that the use of technology to increase productivity, offset volatility in the iron ore price and drive revenue while reducing risk would be a key strategy for Kumba going forward.
"I intend to lead the business towards greater technology adoption, as technology will play a very meaningful role in our future. We aim to achieve a 20% improvement in mining productivity through optimising shift changes, increasing labour availability and improving mine infrastructure."
