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Johannesburg - Arms manufacturer Denel will focus its growth in the African continent, Public Enterprise Minister Malusi Gigaba said on Monday.
"We believe in Africa and we need to become a significant player in terms of infrastructure and manufacturing," Gigaba told reporters during a presentation of Denel’s annual results in Irene.
"We need to believe in the continent and go out to forge partnerships."
He said Africa as a whole was a good platform for Denel to grow and leverage its power on the continent to become a leading player in the global space.
"If we climb on Africa’s growing strength we are in a better position," he said.
Denel, reported a 10% increase in revenue for the year ended Mary 31 2013. This was the third successive growth in revenue.
However, Gigaba said Denel was "not yet out of the wood".
The rise in revenue was attributed to a 34% growth in exports from R1.33bn to R1.8bn. The exports were boosted particularly by the missile and landward defence businesses.
Denel increased its export revenue in all key target markets mostly Africa, Middle East, Asia-Pacific and South America.
Local revenue amounted to 55% (R2.14bn) of total revenue while net profit for the year grew to R71m.
Operating expenditure declined from 27% to 24% of revenue.
Denel CEO Riaz Saloojee said operational savings and new contracts signed had contributed to a significant reduction in the losses incurred.
"During the financial year, we successfully restructured the short-term debt of R1.19bn to a combination of short-term debt, three-year and five-year bonds to mitigate liquidity risks," said Saloojee.
He said the Denel’s financial performance was recognised in the financial markets through an over-subscription on the Denel bond issue.
Saloojee said the company had made "strategic appointments" to strengthen the senior management while meeting its objectives for transformation.
"We are creating a more diverse work force and ensuring adequate participation of black-owned businesses in our procurement and supply chain networks," he said.
Denel’s total spend on preferential procurement and supplier development was about R2bn.
Salojee said the positive results and the newly concluded and about to be concluded contracts of R22bn would be executed over the next seven to 10 years, "to contribute on our sustainability".
"In addition, we have a significant order pipeline that will enable us to grow the business in both local and international markets," he said.
