SUMMARISED AUDITED* FINANCIAL RESULTS AND PERFORMANCE HIGHLIGHTS
for the year ended 31 March 2018
Chief Executive Officer’s statement
Despite difficult local trading conditions during the past year, the IDC remained steadfast in its commitment to industry development, transformation and increasing investment to facilitate inclusive economic growth for the country.
Operating environment
The operating environment under which we are reporting remained under pressure, characterised by weak demand conditions and threats of further downgrades to the sovereign ratings. These factors resulted in subdued investment and production activity, thus impacting negatively on the quality and volume of applications that the IDC considered for funding.
Delivering on our strategy
The past three years have provided us with a solid base as we continue to deliver on our strategy. We have continued to sharpen our focus on the value chains in support of the country’s objectives. These value chains remain relevant in the current environment and are aligned with opportunities in the local, regional and global economies. In the same vein, we continued to optimise our operating model to increase activity levels in order to derive improved value from our industrial capacity development interventions. As a result, in the financial year under review we improved the total value of funding by 9% to R16.7 billion (2017: R15.3 billion). We expect these approvals to have increased our impact on employment through the creation and saving of 29 885 jobs compared to 20 881 in 2017. Cumulatively since 2014, the IDC’s financing activities have facilitated the creation and saving of approximately 109 000 jobs. This has contributed, inter alia, to an inclusive economy by amongst others, funding of black-owned companies, Black Industrialists, women and youth-owned enterprises. Total disbursements for the year increased by 40% to R15.4 billion (2017: R11.0 billion), despite many clients holding back on their investment plans. Ensuring that funding flows into the economy is a critical measure of our success and will remain a priority going forward. I am pleased to report that funding for agro-industries and agriculture increased significantly to R980 million, compared to R203 million in 2017. While this improvement in funding to the agro-processing and agriculture sectors is still not at the desired levels, considering the potential and impact of this sector on job creation, it remains high on our funding agenda. We are also acutely aware of the need to develop the industries of the future to optimise the game changing opportunities that will be integral to the 4th Industrial Revolution.