Denel, the state-owned arms company, has reduced its losses but remains in need of a cash injection to complete its turnaround.
Talib Sadik, the acting chief executive, said the net loss of R347million was better than the previous R549million loss.
This was achieved largely through focusing on core businesses, phasing out legacy contracts, savings on costs, and profits on the sale of non-core assets.
A major element of the turnaround plan has been the formation of partnerships with leading international defence companies.
The strategy of looking for international partners represented a key shift in government policy, Sadik said. Previously, government was not keen to give away control of any of Denel's operations, which it considered strategic.
But it changed after realising that equity partners would provide better market access, skills development and research and development spend.
Denel still requires the R1,7billion outstanding on government's R5,2billion bail out. It has already received R3,5billion, a fair amount of which has been spent on funding restructuring costs and debt repayments.
He said discussions were underway with the public enterprises department to secure the remaining R1,7billion.
Sadik said Denel still had some way to go before it stopped the bleeding, but it would not need to be continuously bailed out by government. It had improved its cash position, repaid a corporate bond and had no debt.