By Lehlohonolo Lehana.
Denel Group reaffirmed the commitment to strengthening its operational and financial sustainability while preserving the critical capabilities required to support South Africa’s sovereign defence mandate.
The state-owned defense and aerospace manufacturer Chief Executive Officer, Tsepo Monaheng addressed the Portfolio Committee on Defence and Military Veterans on Friday, 09 October 2026.
Denel is South Africa’s state-owned defence and aerospace company whose primary purpose is to design, develop, manufacture, and support defence material.
It was established in 1992 when Armscor’s manufacturing subsidiaries were separated from the company.
This was done to facilitate Armscor’s role as the procurement agency for the South African National Defence Force (SANDF).
Denel supports the South African National Defence Force by providing it with advanced military equipment, technologies, and services.
However, years of corruption and mismanagement have caused tremendous damage to the once-excellent company.
During the presentation of Denel’s 2025/26 Annual Report, Monaheng acknowledged the significant challenges facing the organisation, while highlighting progress made in stabilising the business and positioning it for sustainable recovery.
Denel’s turnaround is a journey that requires discipline, accountability and sustained execution. We are under no illusion about the challenges that remain, particularly around liquidity, financial controls and operational sustainability. At the same time, we have made important progress in stabilising the organisation and rebuilding the foundations for a stronger Denel, said Monaheng.
The Annual Report records a 15.8% increase in revenue, from R1.272 billion to approximately R1.473 billion, while cash generated from operations improved.
Denel also continues to build a substantial opportunity pipeline, which exceeds R30 billion.
Monaheng said Denel’s recovery must ultimately be measured through improved delivery, stronger financial management, sound governance and the ability to convert market opportunities into sustainable revenue and cash flows.
“Our focus is clear: execute our existing programmes, strengthen our financial and internal control environment, secure new business, invest in our critical technologies and people and ensure that Denel remains relevant to the defence and security needs of South Africa. Our mandate goes beyond financial performance – it is about safeguarding and strengthening the country’s sovereign defence capabilities.”
Monaheng added closer alignment with the Department of Defence and Military Veterans, the SANDF, Armscor and other stakeholders provides an important platform to strengthen Denel’s strategic role and preserve critical defence capabilities.