Marius Kloppers is stepping down as BHP Billiton’s chief executive officer on May 10, the world’s biggest miner said in a surprise announcement Wednesday, as half-year profits plunged by 58 percent.
He will be replaced by Andrew Mackenzie, the 56-year-old current chief executive of BHP’s non-ferrous business at the global mining giant.
First-half profits dropped to $4.2 billion on lower and volatile commodity prices. Underlying earnings — which exclude one-off writedowns — dropped 43 percent to $5.7 billion in line with analysts’ expectations.
The result for the six months to December 31 saw revenues fall 14 percent to $32 billion, BHP said in a statement, declaring an interim dividend of 57 cents a share, up four percent from a year ago.
BHP described the results as “solid” in a challenging half-year for the global resources industry.
“Substantially lower commodity prices and resilient producer currencies, such as the Australian dollar and the Chilean peso, weighed on margins and profitability,” it said.
“In the short term, we expect a general improvement in the global economy to support demand and prices for a number of commodities. However, the addition of low cost supply in many markets is expected to dampen the pricing upside.”
BHP Billiton reported net operating cash flows of $6.4 billion and said it remained “on track to deliver strong growth at a lower unit cost”.
But it was the departure of South African Kloppers, who been running the miner since October 2007, steering it through the global financial crisis, that drew the most attention.
Last month he warned that China’s steel surge had peaked and iron ore and steel growth was likely to decline, meaning the record commodity prices seen over the past decade would not be sustained.
Chairman Jac Nasser paid tribute to Kloppers who “drove new investments into next generation opportunities including US onshore gas and liquids and created one of the most valuable companies in the world.
“He leaves BHP Billiton a safer and stronger company,” Nasser said.
BHP Billiton had previously said it was always thinking about succession planning but gave no timeframe amid market expectation the process would take a year or two.
Mackenzie, has more than 30 years’ experience in oil and gas, petrochemicals and minerals and joined BHP Billiton in November 2008, the company said in a statement.
“The board has decided that Andrew is the right person to lead BHP Billiton in a changing global environment,” Nasser said.
Mackenzie said: “It is a privilege to be asked to lead one of Australia’s great companies and the world’s leading diversified natural resources company.
The outgoing Kloppers, who will leave the company on October 1, said: “Deciding the right time to retire was never going to be easy,” but that it was the right time to “pass the leadership baton”.
Mackenzie will be based at the company’s headquarters in Melbourne, Australia.
Mackenzie, said on Wednesday that BHP would not exclude deals under his stewardship, though its strategy would remain focused on current assets.
“You would be wrong to say that M&A is completely excluded, but it is not central to the strategy that I am shaping up,” he told reporters. “It is about running what we have extremely well.”
Mackenzie was BHP’s point man in Canada, along with BHP’s now chief financial officer, Graham Kerr, on BHP’s failed $39 billion bid for Potash Corp.