DE BEERS, the world's largest rough diamond producer, expects to appoint a CEO soon as it foresees an improvement in the market for its gems, buoyed by strong growth in China and India.
De Beers has been without a full-time CEO since Gareth Penny announced in July last year that he would leave the company at the end of September. He said he would stay on part-time until the end of last year.
His departure came after De Beers initiated a turnaround strategy for its operations, which entailed slashing production to match the fall in demand triggered by the global financial crisis from late 2008, and recapitalised the business with a $1bn rights offer to its three shareholders. The funding allowed De Beers to restructure its debt repayments.
"We are going through a thorough process trying to find a CEO who's appropriate to run our business and this process has been ongoing for a while now. I'm sure there'll be something soon announced on that front," said Stuart Brown, the acting joint CEO and chief financial officer of De Beers.
Mr Brown said there was no definitive time line on when the appointment would be made.
De Beers, which is 45% owned by Anglo American, reported a 53% increase in diamond sales to $5,9bn for the year to December. Earnings before interest, tax, depreciation and amortisation (ebitda) more than doubled to $1,4bn, giving the group free cash flow of $943m.
Mr Brown said the rise in ebitda was "the highest achieved since our privatisation, reflecting both a strong recovery in the price achieved for our rough diamonds and a significantly lower cost base across our global operations".
De Beers regards its debt, which fell 45% to $1,76bn in the year, to be at a normalised level. This gave it more flexibility to begin growing the company, Mr Brown said.
De Beers produced 33-million carats last year and will grow this to 38-million carats this year and to about 40-million next year.
Bruce Cleaver, chief commercial officer and acting joint CEO of De Beers, said: "China and India in particular continue to deliver extraordinary growth, at 25% and 31% respectively, while in the US, the Christmas sales season exceeded expectations with an increase of approximately 7% for the full year."
Anglo American, which is due to report its full-year earnings on Friday, said it would post underlying earnings of $302m for the year from its investment in De Beers, Reuters reported, adding that Credit Suisse had said the contribution was slightly ahead of its forecast of $296m.
It had a pipeline of growth projects and was not looking for external growth opportunities, Mr Brown said.
"It's going to be all internal growth," he said, "because we are still bound by some of the competition rules from the European Commission."
The biggest project is the expansion of the opencast mine at Jwaneng in Botswana in an investment De Beers describes as the largest to date in that country. The project is forecast to yield 100-million carats worth $15bn over the life of mine, which will run to 2025.