18 Sep Partnerships key to IDC’s financial performance
The Industrial Development Corporation (IDC) continues to enhance its industrial development impact, despite a difficult operational climate. The corporation’s financial results for the year ended March 2014 were announced Thursday September 18.
Record R13.8-billion in approved funding
The IDC reported a record R13.8-billion in funding approvals – a 6% increase over the previous year’s R13-billion.
A big portion of the increase came from funding activities in the green industries, which amounted to R5.7-billion.
“Disbursement, which is the money that has actually gone into the economy, is the second highest in the history of the IDC. Disbursement came in at R11.2-billion, compared to the previous year’s record of R16-billion.” said Chief Executive Geoffrey Qhena.
The results showed an 11% increase in pre-tax profit to R2.2-billion from the previous year’s R2.0-billion, with revenue of R20-billion, which was up from last year’s R14.5-billion.
However, said Chief Financial Officer Gert Gouws, the IDC’s after-tax profit was hit by a change in the method of accounting for taxation of dividends from preference shares, resulting in an after-tax profit of R1.6-billion, compared to the previous year’s R2.0-billion.
“Overall, we had a very good set of results,” Gouws said.
Over the last three years, according to Qhena, the IDC played a leading role in establishing the South African renewable energy sector, through early stage development funding as well as loan and equity funding for implementation.
“As the first round of projects is coming on stream, they are making much needed electricity available through green generation. Private sector players are now playing an increasing role in funding such projects. We also continued to play a major role in manufacturing, including support for suppliers into local infrastructure and strengthening the steel value chain,” Qhena said.
Job creation and regional integration
The main challenge facing the IDC, Qhena pointed out, remains that of job creation. “The number of direct jobs we expect to create and save through our approvals is about 20 000, compared to 22 900 last year.”
“We have identified regional integration as central to IDC’s future activities, expecting significant growth in opportunities across the continent in the next five to 10 years, driven largely by infrastructure development,” said Qhena.
In the 2013/2014 financial year, the corporation approved more than R2-billion in projects in the rest of the continent.
The role of the private sector
Over the next five years, the IDC is looking at investing up to R100-billion into the regional economy. The corporation will increase its borrowings to enable it to support its funding activities.
In order to achieve this, Qhena said, it was important for the private sector to partner with IDC in developing sustainable projects.
Key achievements at a glance
In the course of the financial year to 31 March 2014, the IDC:
- Approved a record R13.8-billion in funding, beating the previous record of R13.5-billion in 2011-12.
- Disbursed a second-highest annual level of R11.2-billion in funding.
- Increased pre-tax profit by 11% to R2.2-billion.
- Supported renewable energy as the basis of a new industry with R5.7-billion.
- Successfully launched a R1.5-billion public bond, which was 2.6 times oversubscribed, in order to meet growing funding commitments.
- Approved, through subsidiary sefa (the Small Enterprise Finance Agency), R1.1-billion in funding for SMME development, a 142% increase on the R440-million approved in 2012-13.
For more information, please contact:
Public relations manager: IDC
Tel: (011) 269 3282
Cell: 082 880 6074
Head: Corporate Marketing and Communications
Industrial Development Corporation
Tel: (011) 269 3809