Arms manufacturer Denel says the turnaround plan its Board has introduced remains at the core of its strategy to return the company to sustainability.

The struggling state-owned defence company has reported an operating loss of R1.9-billion for the past financial year until March 31.

Group Executive Officer Danie du Toit says a decline in reputation formed part of the reason for their dwindling financial position.

He says revenue had dropped by 36% over the period.

The arms manufacturer says its key strategic objectives are to maximise the value of the core business areas, to deliver on strategic partnerships and to combat fraud, corruption and wastage as well as drive cost reduction and optimise the utilisation of assets.

It also says it will seek to ensure the retention of core skills and capabilities, restore reputation and improve employee morale.