Denel achieved just seven of the 23 key performance indicators in its ‘shareholder compact’, MPs learned this week.
Denel appeared before the Portfolio Committee on Public Enterprises at Parliament to brief it on its annual report and financial statements for 2018/19.
According to a statement by the Parliamentary Communication Services, the committee ‘welcomed Denel’s presentation and the work that has been done by the new Board to turn the company around’.
However, MPs learned that the state-owned arms company had failed to achieve sixteen, or 69.6%, of its targets due to ‘liquidity constraints’.
The outstanding targets related to ‘research and development, programme delivery, Broad-Based Black Economic Empowerment, preferential procurement and enterprise development, corporate social investment, sustainable development indicators, and financial sustainability’.
‘Members of the committee told Denel about the importance of always being driven by the common mandate of all the state companies of contributing to the economy of the country.’
Denel’s chief financial officer Carmen le Grange told the committee the company’s revenue had dropped by 38% ‘as a result of low production activity’.
The committee urged Denel to focus on tackling ‘its liquidity challenges so that the entity is able to meet its performance indicators and improve on making profits’.