Explosive Potential?
Shares in Incitec Pivot (ASX:IPL) rallied after naming a new CEO, ex-BHP exec Mauro Neves de Moraes and he will assume the role from January 22. This unconventional appointment may spell an interesting ‘pivot’ in how IPL will navigate their business post the sale of the fertiliser business.
As the coverage was fairly recent, there hasn’t been any change with the technicals. That said, a quick recap: Since breaking down below the primary uptrend, IPL has fallen to $2.70 and has potentially formed a double bottom. A breakout above near-term resistance at $3 would mark the resumption of upward momentum.
Moving back to the new update. The new CEO, Mauro Neves de Moraes has finally been appointed to the role effective from 22 January 2024 and follows a comprehensive search process.
Looking at his background, Mauro Neves has extensive executive leadership experience in the mining and logistics sectors across multiple geographies. More recently, he spent 6 years in senior leadership roles at BHP, contributing to the Escondida copper mine (the world’s largest copper mine) and Queensland coal division. His global expertise in mining and logistics positions him as a strategic choice to lead Incitec Pivot (ASX:IPL), especially the company’s position as a global leader in explosives technology and services for the resources sector.
We do also want to note that the interim CEO, Paul Victor, who served since June will return to his role as CFO. We do want to see if ‘being overlooked’ may lead to internal tensions. The company is currently facing some turbulence since the departure of CEO Jeanne Johns in June not to mention the current controversy where Incitec Pivot (ASX:IPL) has been evaluating the proposed split of its Dyno Nobel explosives business from the fertilizers business, leading to investor furor. After all, the proposed split was largely the brainchild of Johns.
Regardless, we do also believe that Mauro Neves experience as Asset President for BHP Mitsubishi Alliance, and Asset President at BHP’s Escondida operations in Chile bring with him the right network as well technical and managerial expertise to optimize Incitec Pivot (ASX:IPL). In addition, his experience in leadership positions within BHP and other multinational mining companies can provide valuable perspectives on strategic decision-making, growth opportunities, as well as insider knowledge on the workings of mining companies – a key customer base.
All in all, we’re supportive of this appointment and, much like our commentary on last week’s AGM trading update (FAT-AUS-1148), we prefer to see more progress before we adjust our rating on the group.
We continue to maintain our HOLD rating on Incitec Pivot (ASX:IPL). It will remain firmly held in the Fat Prophets portfolio.
