Denel is emerging from a challenging period in its history but is quite confident that it is well on its way to recovery.

It is currently undertaking a critical turnaround to optimise operations, bolster delivery capacity and rebuild trust among industry partners, employees, organised labour, suppliers and end-users within the defence sector.

In this we are receiving significant support from our new Shareholder, the Department of Defence, which enables Denel to integrate more fully into the broader defence community and benefit from stronger backing to capture a growing share of the international defence market and grow our footprint.

The 2025 Annual Report reflects the progress we are making on our journey of transformation. We are establishing the foundation for sustainable growth and operational excellence. We are stabilising our core business strengths and repositioning Denel as a trusted provider of vital defence capabilities. Together with the Board of Denel we identified several strategic success factors which are vital to secure the company future sustainability.

• We must build a healthy order book by securing contracts from both local and international clients.
• We will prioritise programme delivery to ensure that we continue to have repeat orders both locally and internationally.
• We will ensure that adequate working capital is available to support future growth, including the re-engineering of cash flow and the management of working capital.
• We will strengthen ethical leadership and a robust governance culture which will permeate through our entire value chain.
• We are upgrading Denel’s ICT infrastructure and strengthening controls to deliver accurate and credible financial data.
• We will address internal control deficiencies to regain stakeholder confidence and support.

In recent years the Auditor General has expressed significant disclaimers about the company’s internal controls. We are actively working together with the AGSA to implement comprehensive remedial actions, including the re-establishment of a strong internal audit capability. Denel also introduced a wide-ranging fraud and corruption prevention strategy which meets international standards, including lifestyle audits for senior management and executives. We are also embedding a new culture that will enable us to fully address our audit outcomes.

All senior management positions have now been filled. We were able to attract some of the top minds in specialised fields such as engineering, financial management and auditing, strategic management and business development to lead the company through the final stages of restructuring, and beyond.

These strategic initiatives have fortified Denel’s position, ensuring its relevance and sustainability in a competitive and rapidly changing global defence and technology environment.

Denel’s vital role in the safeguarding of South Africa’s sovereign defence capabilities cannot be overstated. It remains a cornerstone of national security, providing the country with control over advanced technologies, systems and platforms necessary for operational readiness and strategic independence.

Pam Dlamini

Cell: +27 (0) 82 686 2198
Tel: +27 (0) 12 671 2970
email: pamm@denel.co.za

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