Denel Land Systems profits triple over last financial year

27 August 2012 by defenceWeb

Earnings before interest and taxes for defence company Denel Land Systems increased from R9 million to R23 million for the 2012 financial year. The company was recently boosted by a record 340 million euro (R3.5 billion) contract with Malaysia to supply a range of turret and integrated weapon systems for its 8 x 8 armoured infantry fighting vehicles.

Denel Land Systems’ turnover for the 2012 financial year amounted to R546 million, down slightly from R554 million the year before. Export turnover increased dramatically, from R73 million to R262 million, according to Denel’s Annual Report 2012.

Although Denel Land Systems’ (DLS’s) financial performance was good over the last financial year, the company’s confirmed order book dropped by a third for the 2012 financial year, reaching R402 million, down from R680 million.

On May 17, 2011, Denel received ‘the largest landward system export contract in SA’s history’, when it received the Malaysian contract. DLS will be responsible for supplying 69 x two man turrets fitted with the South African GI30 30mm main gun; 54 x missile turrets equipped with the GI30 30mm gun and Denel Dynamics Ingwe anti-tank missile system; and 54 x remote control weapons systems. The turrets will be exported to Malaysia over a seven year period – with the first consignment ready for delivery this coming January. The turrets and weapon systems will be integrated on the Malaysian Army’s new 8 x 8 vehicles which are based on the Pars armoured vehicle platforms from the Turkish company, FNSS.

Denel said the future outlook in terms of potential prospects being pursued will double DLS's turnover within the next three years – for instance, DLS successfully demonstrated a new weapon management system for artillery to international clients. The company also highlighted the successful business turnaround and the steady growth over the past five years of DLS. The company’s workforce has a head count of 420, an increase of 29 compared to the previous year.

Denel Land Systems designs, develops, integrates, supplies and supports landward based high-mobility, high-firepower product systems, combat turrets, rapid-fire small and medium calibre weapons, new generation combat vehicle systems, as well as artillery systems. DLS’s combat proven systems are in service in several countries.

Arguably its biggest project at the moment is producing the ‘Badger’ family of new generation infantry combat vehicles (ICV), under project ‘Hoefyster’. The development of variants continues apace, with a significant milestone of the product baseline for the ‘section variant’ achieved on 10 September 2010. This simultaneously kick-started a countdown process towards the much anticipated production order, with another four variants following closely behind the lead prototype vehicle, Denel said.

Project Hoefyster is utilising five modular combat turret variants, armed with the home-grown GI-30 (30 mm CamGun) and 60 mm breech-loading long-range mortar system. The Ingwe anti-tank missile system is integrated into the anti-tank variant of the 8 x 8 armoured modular vehicle platforms. The aim of project Hoefyster is to replace the South African Army’s ageing fleet of Ratel infantry combat vehicles in a phased approach, whilst also creating specific export potential.

Another notable achievement over the last financial year for DLS came when it obtained a vehicle capability after taking a majority stake in LMT Holdings (Pty) Ltd. This will enable DLS to produce the Badger, which is a local version of the Finnish Patria combat vehicle.

Denel recently announced that, as part of restructuring designed to save money and increase efficiencies, Denel Land Systems and Mechem will be integrated into a single entity. At the group’s headquarters in Irene, Denel Dynamics will incorporate the division responsible for the design and manufacturing of unmanned aerial vehicles (UAVS) as well as Denel Integrated Systems Solutions.