Denel Aeronautics recorded a R61 million loss in the 2019/20 financial year on revenue of R770 million.
For the previous financial year, the division made a R17 million profit, according to the latest Denel annual report.
Exiting the aerostructures business is set to save Denel hundreds of millions of rands per year. According to the annual report, exiting Denel’s aerostructures manufacturing business, which was expected to be largely concluded by the end of July 2020, resulted in an annualised savings benefit of R260 million.
As part of the exit and winding up of Denel Aerostructures, the Ribs Spars and Sword work package for the Airbus A400M Atlas transport was successfully transferred in September 2019, along with two work packages for other customers.
“With the winding up of Denel Aerostructures, it was contemplated that 230 employees would be retrenched. Through redeployments within the Denel Group, this number was reduced to 177 retrenchments, 58 of these being voluntary retrenchments,” the company stated. Denel Aeronautics employs just over 800 people.
A key highlight of the year under review was the return to service and sale of 12 ex-South African Air Force Cheetah fighter aircraft to Draken International under Project Dragon. The first milestone came on 18 October 2019 with the delivery of the first two aircraft.
Despite difficult trading conditions, Denel Aeronautics was able to maintain current certifications and accreditations from various external bodies and regulators such as the International Standards Organistion (ISO) and the aerospace standard with Bureau Veritas International, Aircraft Maintenance Organisation approvals with the South African Civil Aviation Authority, and aircraft and subsystem OEM accreditations with Airbus Helicopters, Lockheed Martin, Russian Helicopters and Safran Helicopter Engines.
This allowed it to maintain South African Air Force C-130, Oryx and Rooivalk aircraft. Denel said this helped the Air Force respond to the COVID-19 pandemic. “The Oryx transport helicopters carried critical medical and humanitarian supplies to communities on a daily basis and conducted surveillance operations. Denel Aeronautics also carried out critical repair work on the main gearboxes of two Oryx helicopters and technical support teams were on standby around the clock to do maintenance, repairs and testing of equipment.”
Another highlight of the year listed by the Kempton Park-based company concerns the Denel Technical Academy, incorporated under Denel Aeronautics, which completed training for the Cameroon Air Force with 117 learners successfully completing their aircraft trade studies.
Furthermore, 38 learners from North West were successfully handed over to their sponsor, the North West Provincial Government, to complete on-the-Job training after completion of their initial theoretical training. The last 90 students cosponsored by Denel and the National Skills Fund were due to complete their on-the- Job training during 2020 and be prepared for their trade testing by the Denel Technical Academy.