Denel reports steady improvement as the company moves through a critical restructuring process aimed at restoring stability, strengthening operational capacity and rebuilding confidence across the defence sector. The organisation says it is emerging from a difficult period and is confident that recovery is well under way.

 

With support from its new shareholder, the Department of Defence, Denel is working to integrate more closely with the wider defence community. This backing is expected to help the company retain and expand its presence in international markets while reinforcing its position within South Africa’s defence industry.

 

The 2025 Annual Report outlines progress made in transformation efforts and the establishment of a foundation for long-term sustainability. Denel notes that it is stabilising core strengths and repositioning itself as a trusted supplier of essential defence capability.

 

Together with its Board, Denel has identified several success factors to secure the company’s future:

• Building a healthy order book through contracts from local and international clients.
  • Prioritising programme delivery to support repeat business.
  • Ensuring sufficient working capital for growth, including improved cash flow management.
  • Strengthening ethical leadership and governance across its operations.
  • Upgrading ICT infrastructure to improve control environments and financial reporting.
  • Addressing internal control weaknesses to restore stakeholder confidence.

The Auditor General has previously raised significant concerns regarding internal controls. Denel says it is working with the AGSA on remedial measures, including re-establishing internal audit capacity and introducing a fraud and corruption prevention strategy aligned with international standards. Lifestyle audits have also been applied to senior management and executives.

 

All senior management roles have now been filled, with experienced professionals appointed in engineering, finance, auditing, strategy and business development to guide the organisation through the final stages of restructuring.

 

These measures, Denel states, reinforce its relevance in a competitive global defence and technology landscape. The company highlights its continued central role in safeguarding South Africa’s sovereign defence capabilities, maintaining control of key technologies and systems required for national security.