State arms manufacturer Denel says it’s starting to reap the rewards of its turnaround efforts after a decade in the doldrums.
CEO Tsepo Monaheng has today told parliament two of its four business units are finally out of “ICU”, after setbacks he attributed to the COVID-19 pandemic.
Monaheng’s positive report back follows this week’s protest by staff over salary increases they say they have not had in five years.
Denel starting to reap the rewards
However, more job losses could be on the cards as Denel indicates its looking at initiating another retrenchment exercise in its attempts to properly staff its operations.
Despite a government sponsored recapitalisation of R3.4 billion rand in 2022, Denel CEO Tsepo Monaheng says the company has been unable to pay all its creditors which are still owed R700 million.
The company has not filed financial statements in five years, when it was deemed technically insolvent, and has not turned a profit since 2015.
“Because Denel has been in problems for many years, the banks are not supportive of our future plans.”
Despite the cash flow problems, Monaheng today painted a picture of a company on the up, with plans to turn a profit at the end of this financial year.
“We are sitting at the point where we have to get back that trust from our customers, including our own defence force, that Denel will be able to deliver.”
He said Denel had lost lucrative international orders because it’s been unable to get the money to fund them.
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