Exxaro’s Nombasa Tsengwa to take helm in 2023, but firm tight-lipped on future focus

Nombasa Tsengwa, head of coal, Exxaro Resources

EXXARO Resources shares returned to a five year high around R181 this morning following the release of results for the year to end-December showing a 26% increase in core headline earnings to R29,73 a share and the declaration of both final and special dividends.

Exxaro is paying a final dividend of R12.43 a share which takes the total normal pay out for the year to R18.86, but the group has also declared a special dividend of 543 cents a share following the sale of its stake in heavy minerals and titanium company Tronox for R5.8bn.

A further significant development is that the group has laid out its management succession plans as it transitions from an overwhelming dependence on coal towards greater exposure to alternative energy business through subsidiary Cennergi in a strategy that has been spearheaded by the current CEO, Mxolisi Mgojo.

Mgojo will step down on May 31, 2023 when he reaches the retirement age of 63 and will be replaced by Nombasa Tsengwa who is the current head of Exxaro’s minerals business and has now been appointed CEO-designate.

Tsengwa joined the former Kumba Resources as GM for safety, health and environment in 2003 and became directly involved in operational management from 2010 when she was appointed GM of Exxaro’s tied coal and Mpumalanga operations. She was appointed executive head of coal operations in 2016.

Mgojo has remained steadfastly tightlipped so far on the specifics of Cennergi’s strategy and plans over developments in South African alternative energy projects.

Cennergi currently owns two wind farms and, following its consolidation into the group from April 1 last year – after Exxaro bought out partner Tata – reported core EBITDA (earnings before interest, tax, depreciation and amortisation) of R648m for the nine month period to end-December. Free cash flow generated by Cennergi for the nine month period was R152m.