Page 84 - World Airnews Magazine December 2019 Edition

NEWS DIGITAL

TURNING AROUND DENEL

Denel’s chief financial
officer is cautiously optimistic
that the conglomerate is
SAFE SECURE STYLE turning around and headed for
financial sustainability, with
major restructuring underway
R2 400 000 at the group.
This was said by Carmen
Web Ref: H1190 le Grange at the recent sixth
annual Aerospace, Maritime
• 2 Bedrooms • Laundry and Defence conference.
The event saw the outgoing
• 2 Bathrooms • Dressing room South African secretary for
2
• 2 Garages • 260m Floor defence Sam Gulube and other
• 2 Patios • 556m Erf captains of industry tackle the
2
current state of the defence
sector and its future. It also
Set within a secure estate, in Sheffield Beach, Ballito, this beautiful spacious home is saw United Nations officials
ideal for the young couple starting out, or for those wanting to downsize. explain their procurement
Its an entertianers ideal, with a gracious dining area leading onto a sheltered patio whilst processes and opportunities Denel will exit loss making projects such as the A400M Airbus Military contract
for the local industry.
the lounge flows onto the second sunny outdoor area. Le Grange told hundreds of
The level home has a wonderful size kitchen that is full of light aand plenty of delegates that Denel was still
cupboards. Space for a double fridge. The special feature is the frosted back door which facing a number of challenges. In the 2018/19 financial year the Systems, Spaceteq and insurance company Densecure.
Changes are also planned for the optronics side of the business.
means the space is always dancing with light. company’s revenue was down 38% to R3.8 billion, compared to Denel is open to investment, particularly regarding companies
R5.8 billion the year before.
The bathrooms are modern with special features in each. Special cattention has been Similarly, cash in 2018/19 was R575 million (from R1.3 billion that can invest in equity, can provide access to additional markets,
given to the main bedroom, which has a large dressing room leading to the laundry and the year before), and research and development funding R108 have a proven track record and protect existing jobs. Denel is
washing courtyard. million (down from R769 million). Denel made a R1.749 billion currently examining 40 expressions of interest in the company.
loss in 2018/19 compared to R1.053 million the year before – the Le Grange noted some progress in the turnaround to date.
The double autimated garage is extra big, with an extra space for a workshop. conglomerate last made a profit in 2016. This includes an order intake of R7.8 billion in 2019/20 compared
Ballito is a thriving young coastal town, with plenty of schools, shopping malls, a mere A number of factors are making it difficult to turn things around to R509 million in 2018/19; the signing of a R6.3 billion export
order (the largest to date); a solid order backlog of R17.4 billion
twenty minutes from King Shaka International Airport. Sheffield Beach is a much more quickly, including low production activity, labour under-re- covering four years of sales revenue; exiting onerous contracts that
quieter suburb with pristine beaches and rock pools great for fishinga and those long coveries despite headcount reductions, high interest expense, cost should save R250 million per year; and the reduction of operating
to exit loss-making divisions and onerous contracts, and continued
walks. Sheffield Cove Estate is secure, pet friendly with a great swiiming pool and play- liquidity challenges. costs by R500 million, including R15 million at head office level. Q
ground area. However, Le Grange is confident of improvements in future years
due to the R1.8 billion capital injection from the state as well as
better leadership from the new board appointed in May 2018.
Denel is co-operating with the state capture enquiry and Special
Investigating Unit (SIU) in pursuing criminal litigation to recoup and
claw back financial losses emanating from state capture.
“The future can’t not have a Denel in it,” le Grange said.
“It would not be a good thing if Denel is liquidated as we play a
critical part in industry. We plan to improve in future years and in
the next budget we will get a charge from the shareholder.”
To transition to the future, Denel plans to exit some areas and
keep other core products and systems, namely artillery, missiles,
infantry systems, the Overberg Test Range, systems integration
division, cyber capabilities and Rheinmetall Denel Munition.
Strategic partnerships will be developed regarding aircraft and
engine maintenance, repair and overhaul (MRO), the Rooivalk
attack helicopter, unmanned aerial vehicles, maritime MRO and
armoured vehicles.
In terms of loss-making divisions, the group will exit the aero
structure business (it came out of the A400M contract at the
beginning of this year); exit the foundry (this was built for PMP in Denel will continue with the Rooivalk - a third generation
Ballito 1970s and requires investment; exit the “huge” property portfolio; attack helicopter engine, maintenance and overhaul.
Celia Tabb 078 988 7727 exit the gear ration division of Denel Vehicle Systems, as well as Photo: Warren Rohner / Wikimedia Commons
Denel Sovereign Security Solutions, the canine unit of Denel Land
celia@sothebysrealty.co.za
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