CAPE TOWN - Struggling South African state arms firm Denel Group on Wednesday said it was not forecasting a “very positive” 2018/19 financial year as the company was still restoring good governance.
“We are forecasting not a very positive year in this year as a result of all of those. We still have an order book and the intention as part of the of the turnaround is to grow that order book because of the opportunities that are there particularly at the export market,” board member Zoli Kunene told Parliament's portfolio committee on public enterprises.
He was briefing MPs on performance targets for 2018/19 and progress made in addressing governance challenges.
“The 2017/18 financial year is still under audit by the auditor general, there are still some outstanding activities that we are still in the process of concluding with the auditor general. But to mention that the objectives that were set in most cases, this will show as we present the numbers at the appropriate time.
“In most instances, we see the impact of lapses in governance, we see the impact of mismanagement of the organisation that has essentially affected the performance of the company,” he added.
Kunene said relationships with key stakeholders have been strained as a result of the current liquidity issues experienced by the company and partnerships have suffered.
“We have seen in terms of financial performance, poor working capital management that has resulted in some of the finances that we have,our operational excellence in terms of contract execution. We have not delivered in some of the key programmes both locally and international, that were contracted as a result of primarily the liquidity issues.
“Contracting cash returns, all of those items, weak balance sheet have impacted the performance of the organisation,” he said.