Denel Group division Denel Dynamics recorded a R460 million loss for the 2017/2018 financial year in spite of progress with several programmes, including the Seeker 400, A-Darter and Al Tariq.
According to the latest Denel annual report, with revenue of R1.278 billion for 2017/18, Denel Dynamics contributed 20% of the Group’s revenue. Around half of this was from export contracts. However, the division made a loss of R463 million, compared with a loss of R2 million for 2016/17.
One of the main contributors to the loss was the Al Tariq guided bomb. “In June 2018, we completed the production of the Al Tariq precision guided munitions together with Tawazun Dynamics. The design portion of the contract had been delayed leading to further delays in the production. This was at a severe cost contributing R319 million in losses for the current year,” the Denel annual report for 2017/18 stated.
Denel designed and developed the Umbani (Al Tariq) bomb kit system to improve the accuracy and range of Mk 81 and Mk 82 bombs. It provides the user with an all-weather, day or night operational capability, utilising GPS/INS guidance or imaging infrared (IIR) with a complete automatic target recognition (ATR) capability or a semi-active Laser (SAL) seeker for increased targeting accuracy.
A centre of excellence for manufacturing these weapons has been established in the United Arab Emirates as a part of a joint venture established by Denel and the country’s partner Tawazun Dynamics, which also contributes to Denel’s offset obligations. The programme accounted for revenue of R308 million (2016/17: R168 million) during the year.
On the unmanned aerial vehicle (UAV) front, Denel Dynamics has made progress with the Seeker 400 UAV and was contracted to supply the Seeker 400 to the United Arab Emirates. Denel said the product offering is a comprehensive solution consisting of six aircraft, two ground control stations, six electro-optic payloads, as well as the integration of other sensors, such as the synthetic aperture radar (SAR), satellite communication (SATCOM), and the integration of weapons. The weapon of choice for the client is the P2, recently designed for Tawazun Dynamics.
The Seeker 400 system produced for the South African National Defence Force (SANDF) has been successfully completed with the handover of the system during the 2017/18 financial year. Finalisation of the military type certification was due to follow in the last quarter of 2018 after the end user’s operational tests and evaluation. This is expected to be accomplished in the 2018/19 financial year and marks the completion of the programme. The value of the programme is R339 million of which R333 million has been invoiced to date.
Regarding air-to-air missiles, Denel noted that the performance qualification flight trials for the A-Darter air-to-air missile were successfully completed. This also completed the critical design review and established the product baseline ready for industrialisation and manufacturing. The initial batch of four acquisition trainer missiles is planned for delivery to the South African Air Force (SAAF) in the 2018/19 financial year with the final batch of operational missiles scheduled for delivery in the 2021 calendar year.
The value of the joint South Africa/Brazil programme is just over R2 billion. The follow-on production contract for the SAAF with a value of R939 million was placed with Denel in March 2015 and revenue to the value of R223 million (2016/17: R219m) was recognised during the last financial year.
Meanwhile, the radar seeker for the Marlin missile was tested in a number of ground and captive flight tests during the year under review. After completing successful integration on the missile during November 2017, a successful guided flight test was conducted from a ground launch to a manoeuvring target. The test proved the maturity status of the missile and the radar seeker design, Denel said.
In 2017/2018 Denel Dynamics was contracted by Patria Aviation Oy to upgrade the Umkhonto-IR Vessel Mounted Equipment (VME) on four Hamina class vessels of the Finnish Defence Force. This includes the supplying of services for the commissioning of all four Hamina-class vessels. The contract also includes the supply of integrated logistic support training and documentation for the upgraded Umkhonto-IR surface-to-air missile system.
Progress was also made with the EO-SAT1 earth observation satellite being designed by Denel Dynamics. High resolution payload detailed design of the satellite was completed (optics and detector electronics). The first successful radiation tests on electronics components was carried out and data reduction completed. Communications between satellite and ground station was achieved with software-defined radios.