De Beers has announced a surge in mid-year profits – and the resignation of its CEO, Gareth Penny.
In an official statement released with the company’s interim results, De Beers said that 48-year-old Penny had advised the board that after five years in the role it was time to step down.
De Beers chairman Nicky Oppenheimer said De Beers strong first-half results were a testament to Gareth Penny’s leadership, which saw the company through the recession, and positioned it for strong revenue growth as “we emerged into recovery”.
“Gareth has made an enormous contribution to De Beers throughout his 22 years with the company and, most recently, five years as CEO.
“He has been a passionate and effective leader during some of the most difficult challenges De Beers has faced in its long history.
“I have full confidence in the experienced management team that Gareth has assembled, who will carry on our current course to deliver shareholder value.”
Moti Ganz, president of the International Diamond Manufacturers Association also praised Penny’s achievements as CEO saying that he could not have created a more spectacular exit – “stepping down after reporting the highest H1 profits (EBITDA $762 million) in the history of De Beers (in relation to sales volume) and the highest return on assets ever achieved”.
“Penny stood at the helm of De Beers during the greatest financial and diamond demand crisis since World War II,” he said.
“He acted decisively and didn’t hesitate to reduce production by 50 percent reduced costs by 45 percent, and demonstrated utmost commercial restraints, not resorting to distress selling to reduce debts,” added IDMA secretary-general Ronnie VanderLinden.
Penny will step down as CEO gradually over the coming months.
Stuart Brown (chief financial officer) and Bruce Cleaver (chief commercial officer) will serve as acting joint-CEOs until a successor is appointed.