Junie Sihlangu, The South African, October 1, 2019
The South African Broadcasting Corporation (SABC) tabled its 2018/19 Annual Report in Parliament. The broadcaster revealed that their turnaround plan would ensure financial stability.
The SABC gave a rundown of their financial status on 30 September 2019. They expressed how they had faced “challenging conditions”, with a net loss of R482.4 million at the end of March 2019.
However, the broadcaster stated that the net loss was a 35% improvement on the restated loss which they had incurred in the 2017/18 financial year. SABC Board Chairperson, Bongumusa Makhathini blamed sporting events for over R400 million of the net loss.
The interest incurred as a result of liquidity constraints was also blamed. Another contributor to the broadcaster losing money was the decline in total revenue by 3% to R6.4 billion from the 2017/18 financial year.
The SABC also revealed a major improvement in their financial standing. They noted how their total expenses had declined by 6%, or R475 million, to R7 billion from that of the 2017/18 financial year.
Decline caused by “cash flow constraints”
Despite the broadcaster not improving so much, they still remained confident for their financial future. The organisation shared:
“While the SABC pursued cost containment measures actively, the decline was mainly as a result of cash flow constraints leading to a significant curtailment of investment in content, infrastructure, repairs and maintenance and marketing.”
The broadcaster added:
“The SABC’s liquidity constraints resulted in an increase in total liabilities, mainly due to an increase in trade and other payables amounting to R1.6 billion as at 31 March 2019, with creditor payment days nearing 143 days.”
What the SABC has done to improve their financial standing
By 31 March 2019, the broadcaster had R72 million cash on hand which was a decline of R58 million from the prior year. The company also stated how they’d worked hard on improving their “internal controls and ensuring that governance is restored in the organisation” during the year they were under review.
Another positive outcome was the “decline in irregular expenditure incurred in the financial year by 41% to R336 million.” Most of it was said to be related “to transgressions in previous years.”
The broadcaster added:
“Although fruitless and wasteful expenditure increased, 63% or R141 million of the amount reported for the 2018/19 financial year related to transactions incurred in prior years. Of the remaining R83 million, R81 million was incurred as a result of interest and penalties due to late payments caused by cash flow constraints.”
Auditor general gives a qualified opinion of the SABC
The state owned organisation lauded the auditor general’s improved opinion from a disclaimer opinion for the 2017/18 financial year to a qualified opinion for the year under review.
They shared that the improvement was due to better work being done with the management of property, plant and equipment. The government also announced that capital would be given to the SABC to assist with the corporation’s liquidity issues.
The broadcaster also resolved 96% of the audit findings related to the 2017/18 financial year. They claimed to have “performed well in meeting obligations to nation-building and social cohesion.”
Regarding the refusal to broadcast the 2019 Rugby World Cup held in Japan, the organisation was adamant that their decision was made because it wouldn’t have made “commercial sense” to air the matches.