State-owned defence industrial group Denel told Parliament’s Standing Committee on Appropriations (SCOA) on Wednesday that its revenues during the 2025/26 financial year (FY) had increased to R1.4-billion, from the R1.2-billion accrued in FY 2024/25. The group did so in a presentation to the committee. These improved revenues come in the main from maintenance contracts at its Aeronautics, Landward and Pretoria Metal Pressings (better known as PMP) businesses.

However, Denel’s net profit in FY 2025/26, at R156-million, was down on the R193-million achieved in 2024/25. The 2024/25 figure was the first net profit recorded by the group in about a decade. (In FY 2023/24, it had had a net loss of R532-million.) Its total borrowing in FY 2025/26 was R58-million, a significant decrease on the R183-million borrowed in FY 2024/25.

In terms of operational output, the group informed the SCOA that in FY 2025/26 it had successfully supported eight Oryx and five Rooivalk helicopters, as well as two C-130 Hercules transport aircraft, for the South African Air Force (SAAF). It had further delivered four (yes, four) operational A-Darter air-to-air missiles to the SAAF.

In terms of transformation, the proportion of women in the workforce increased slightly from 28% in FY 2024/25 to 29.6% in FY 2025/26. The proportion of African, Coloured and Indian employees had risen from 69.8% to 78.7%, while the number of internships provided by the group rose from four to 16, over the same period.

Denel’s operating costs margin was 60% in FY 2025/26, 54.6% in FY 2024/25, and 74.5% in FY 2023/24. In FY 2025/26 it had net finance costs of R192-million, compared with net finance income of R152-million in FY 2024/25. FY 2023/24 had also been a year of net finance costs, totalling, coincidently, R152-million.

Denel earned income from its associate companies – enterprises in which it held a minority stake. In FY 2025/26 that came to R716-million, a significant increase over the R411-million achieved in FY 2024/25, which itself was a significant increase over the FY 2023/24 figure of R125-million.

The group has been solvent since 2023. But it told SCOA that liquidity constraints continued to be inhibiting. This was made worse by the fact that traditional finance houses were reluctant to support it. “Denel has unlocked alternative means with the support of the Shareholder [government] to access facilities with government collateral,” the group told SCOA.