{"id":872298,"date":"2026-08-27T13:00:00","date_gmt":"2026-08-27T11:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=872298"},"modified":"2026-08-27T12:16:45","modified_gmt":"2026-08-27T10:16:45","slug":"state-owned-company-swings-into-a-r4-6-billion-loss","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/872298\/state-owned-company-swings-into-a-r4-6-billion-loss\/","title":{"rendered":"State-owned company swings into a R4.6 billion loss"},"content":{"rendered":"\n

The Industrial Development Corporation (IDC) recorded approximately R4.6 billion in losses in the 2026 financial year, largely due to the performance of its subsidiaries.<\/p>\n\n\n\n

The IDC is a state-owned company responsible for providing funding and strategic partnerships to grow South Africa’s industrial capacity.<\/p>\n\n\n\n

The company funds new and existing businesses through venture capital, equity, bridging finance and other methods.<\/p>\n\n\n\n

It is also responsible for supporting job creation in the country and supporting several industrial sectors, including agriculture, mining, and energy.<\/p>\n\n\n\n

For the 2025\/2026 financial year, the company laid out 18 key performance indicators and achieved eight of them.<\/p>\n\n\n\n

One of the company’s biggest achievements is the number of jobs created, with the initial target being just under 30,000 for the year.<\/p>\n\n\n\n

The IDC ultimately created over 71,000 jobs during the year and met its targets for work opportunities through the Social Employment Fund (SEF).<\/p>\n\n\n\n

Some of the indicators the group failed to achieve include the value of on-balance funding disbursed and the exit of its subsidiary, Foskor, from business rescue.<\/p>\n\n\n\n

In its results for the 2026 financial year, the IDC reported group revenue of R20.6 billion, a slight decrease from R21.7 billion in 2025.<\/p>\n\n\n\n

The group reported a loss of approximately R4.65 billion for the year, swinging from its R329 million profit in 2025.<\/p>\n\n\n\n

Despite the group’s overall losses, the IDC’s core company posted R2.3 billion in profit from its R11 billion in revenue.<\/p>\n\n\n\n

The company had significantly lower operating expenses than the overall group, with the group’s operating expenses amounting to R15.8 billion and the company’s reaching R3.2 billion.<\/p>\n\n\n\n

A major contributor to the IDC group’s overall losses was taxation, with pre-tax losses amounting to only R1.5 billion.<\/p>\n\n\n\n

Losses for the IDC’s subsidiaries<\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

The IDC’s R4.65 billion in losses was largely due to the performance of several subsidiaries, including Foskor.<\/p>\n\n\n\n

Foskor is a phosphate and phosphoric acid producer in South Africa, a vital component in producing fertiliser.<\/p>\n\n\n\n

The company has mining operations in Phalaborwa, Limpopo, and processes materials at its acid division in Richards Bay.<\/p>\n\n\n\n

The company has faced several financial difficulties and has consistently recorded losses in recent years.<\/p>\n\n\n\n

Foskor struggles with a dependence on several other companies to continue operations, such as Transnet for transporting raw materials to its acids division in Richards Bay.<\/p>\n\n\n\n

The company reported approximately R2.8 billion in losses for the 2026 financial year, extending its 2025 losses of R277 million.<\/p>\n\n\n\n

The company saw its income from fertiliser and acid sales slightly decrease to R5.4 billion in 2026 from R5.9 billion in 2025, and a slight drop in income from mining operations.<\/p>\n\n\n\n

The IDC set targets to improve Foskor’s performance, including increasing production in its acid division and achieving 90% of operating profit.<\/p>\n\n\n\n

Foskor failed to meet either of these targets and only improved production in its acid division by 65% of the board-approved goals.<\/p>\n\n\n\n

The IDC is estimated to own between 59% and 85% of Foskor, and has historically tried to reduce its ownership in the business through sales to other investors.<\/p>\n\n\n\n

In its efforts to keep South African jobs, the IDC also committed approximately R2.5 billion to Tongaat Hulett after it entered business rescue.<\/p>\n\n\n\n

The post-commencement funding was provided to prevent the company’s liquidation and will result in the IDC holding a large, but not controlling, stake in the business.<\/p>\n\n\n\n

The IDC said it entered into the agreement with Tongaat Hulett and Vision Group to “support implementation of the approved business rescue plan, preserve trading operations and avoid liquidation.”<\/p>\n\n\n\n

Since the end of the 2026 financial year, the IDC has also approved R500 million in funding to ArcelorMittal South Africa.<\/p>\n\n\n\n

The transaction will result in the IDC holding a minority stake in the company and, if completed, is expected to have a major impact on the IDC’s financial position and strategic direction.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Industrial Development Corporation has recorded approximately R4.6 billion in losses, despite its core company turning a profit.<\/p>\n","protected":false},"author":131,"featured_media":818369,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"posted","_sma_x_autopost_error":"","_sma_x_post_id":"2092930384157667629","_sma_facebook_post_id":"191437357620492_2188106702009729","_sma_instagram_post_id":"18164491420472900","_sma_x_attempts":1,"footnotes":""},"categories":[9872],"tags":[26309,1195,13343],"class_list":["post-872298","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-foskor","tag-industrial-development-corporation","tag-tongaat-hulett"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/872298","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/131"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=872298"}],"version-history":[{"count":12,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/872298\/revisions"}],"predecessor-version":[{"id":872337,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/872298\/revisions\/872337"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/818369"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=872298"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=872298"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=872298"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}