Denel’s posting a profit, although small, a second year running is most welcome – the more so as it derives from sales, not account adjustments.
It is sadly rare these days to see a state owned company both well-run and profitable. Kudos to the team of 6700 staff!
We do look forward to more, especially with news that Denel secured approximately R5 billion in export orders in the 2011/12 financial that will be executed over the next five to seven years. Welcome also is that future “growth opportunities are underpinned by export orders already concluded as well as local defence orders expected to become operational in the next 24 months.” It will be good if that happens. The last major projects awarded that I know of is Cytoon in 2003, Acrobat in 2006 and a fraction of Hoefyster in 2007.
Good too is ongoing state support for Denel’s vast debt, run up before restructuring efforts in 2006, when the company lost R1.6 billion. Interest payable to commercial banks have been a blight on the books ever since.
New CE Riaz Saloojee – this is his first set of financials – also promised to up research and development spend, obviously welcome. But we’ve heard that before and action is required.