Johannesburg - Denel, South Africa's largest manufacturer of defence, aerospace and security products, has accelerated its recovery, reducing its net loss by R287m to R246m in the year to March 2010.
Talib Sadik, Denel's Group Chief Executive, on Friday drew specific attention to the impact of Denel Saab Aerostructures (DSA) which posted a significant loss of R328m.
In addition, the group carries debt of R1.9bn with a resulting R130m interest burden in the absence of the requested recapitalisation. Were these items to be excluded from Denel's results, the organisation would have recorded a profit of approximately R200m.
Without the losses incurred at DSA, Denel would have returned to profitability.
The stronger financial performance - Denel has narrowed its net loss to R246m from R533m in the previous year - reflects progress in line with its turnaround strategy instituted some four years ago. That strategy has been refined to ensure continued turnaround aimed at improving market access and better operational performance and relationships with key clients and suppliers.
The defence and security divisions of the business generated an operating profit of R200m against a profit of R13m in the previous year. The improved performance resulted from growing, positive support received from the Department of Defence, better programme management and a more entrepreneurial culture across the Denel Group through its decentralisation philosophy.
The group's total order book currently stands at R15.8bn compared to R3.8bn in 2006, while its total revenue for the year was R3.6bn. Currently the total opportunity pipeline adds up to R28bn which includes a possible revenue stream of R5.8bn over the next three years.
"We are pleased at our stronger financial results which show accelerating progress on our turnaround strategy", says Sadik. "Whilst these are massively important, they are but one of the indicators we use to judge our success.
"We are a major earner of foreign currency and contribute to the South African economy on many fronts, among them the development of highly technical manufacturing capacity as well as related skills and competencies.
We offer fertile ground for nurturing engineers, technicians and artisans, many of whom later contribute to key national projects to the wider RSA industry sector."