South African aerospace manufacturer Denel has written off R305 million ($28 million) related to the Rooivalk attack helicopter. The move pushes net losses up to R363 million for the year to 31 March.
The company has yet to sell a Rooivalk to any customer except the South African National Defence Force, which has ordered 12. Production costs came to R179 million, with another R126 million ascribed to Rooivalk research and development, and R124 million in one-off restructuring costs. Sales were up 9.2% at R3.95 billion.
Although Rooivalk has failed to attract overseas orders, Denel continued to increase its export business, now 52% of sales. The South African rand has fallen 25% in the last year, and higher export earnings will help offset the increased cost of imported parts.
State-owned Denel has issued R825 million in debt to fund restructuring efforts, aimed at selling off or turning around loss-making businesses.
BAE Systems' acquisition of a 30% stake in Denel will help it expand in the growing USdefence market, where Denel still has a relatively small share.
The BAE Systems equity acquisition has been under negotiation since 2000, and was approved earlier this year by the South African government, but a date has still not been set (Flight International, 21-27 May). It could be followed by Denel's flotation in South Africa.
Source: Flight International