JOHANNESBURG – South Africa’s struggling state-owned defence company, which had to be bailed out by the government last August, suffered an operating loss of 1.9 billion rand ($125 million) for the year to March 31, it said on Friday.
Denel, which makes military kit for the South African armed forces and clients in Africa, the Gulf and Europe, said its annual revenue had plunged to an all-time low of 3.76 billion rand due to liquidity constraints.
“The decline in our reputation has also had a draining impact on our financial position,” Group Chief Executive Danie du Toit said in a statement, noting that revenue dropped by 36% over the period.
The company, which is among several state-owned enterprises being kept afloat with government bailouts, said it was technically insolvent at the end of March 2019, but it was recapitalised by the government with an injection of 1.8 billion rand ($118 million) in August.
The cash crunch had left it struggling to pay salaries and suppliers in recent months.