Chief executive TP Nchocho said the corporation had further approved a combined R950 million from its Covid Essential Supplies and Distress Funds to support businesses affected by the Covid-19 pandemic. Photo: File
THE INDUSTRIAL Development Corporation (IDC) facilitated R7.4 billion worth of investments into the local economy for the financial year to March, with R6.3bn from on-balance sheet funding and R1.1bn off-balance sheet funds managed on behalf of other government entities.
The state-owned entity said despite a subdued economic environment characterised by an economic lockdown, the result of the Covid-19 pandemic, it had facilitated the creation, saving of 13 354 jobs.
Chief executive TP Nchocho said the corporation had further approved a combined R950 million from its Covid Essential Supplies and Distress Funds to support businesses affected by the Covid-19 pandemic.
“The disruption in both the local and supply chains resulting from the economic lock down had a knock-on effect on our funding activities. This is telling in the strain that our business partners endured.
“This context underpinned our decision to structure some funding products as well as interventions aimed at providing cash flow relief and deferments amounting to R778 million for struggling clients,” he said.
This intervention benefited 75 IDC clients spread across mining, manufacturing, metals, Agro-industrial, services and small businesses.
The IDC Group made a R33m loss in the year under review – a 99 percent improvement in performance compared to the R3.8bn loss recorded in the previous time last year while impairments and write-offs declined significantly from R7.7bn recorded in the previous year to R2.2bn.
The IDC’s strategy to improve and expand the quality of its portfolio of clients yielded positive results, with R1.5bn, or 39 percent of new approvals rating as low- to medium risk.
Nchocho said while some distressed legacy investments skewed this picture, strategic interventions adopted during the financial year were bearing fruit at distressed large investments and subsidiaires. The IDC Corporation made a profit of R3.3bn compared to a R3.1bn loss recorded in the previous reporting period.
IDC chief financial officer, Isaac Malevu, said the IDC would augment its funding activities in the year ahead in support of government’s economic recovery efforts. “The improved balance sheet means that IDC is well geared and positioned to take on more funding activities in support of both government and private sector led investment initiatives. As more entrepreneurs begin to come out of their cash preservation mode, we are readily available to support economic growth,” Malevu said.
banele.ginindza@inl.co.za
BUSINESS REPORT
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