The South African Broadcasting Corporation (SABC) tabled its 2018/19 annual report in Parliament which revealed a net loss of R482.4 million.
The main contributors to this net loss, the SABC said, were losses incurred on sporting events and interest incurred as a result of the liquidity constraints.
A further contributor to the loss is the decline in total revenue by 3% to R6.4 billion from that of the 2017/18 financial year.
Total expenses declined by 6% or R475 million to R7 billion from that of the 2017/18 financial year.
“While the Corporation pursued cost containment measures actively, the decline was mainly as a result of cash flow constraints,” the SABC said.
Its cash flow problems resulted in a decline in investment in content, infrastructure, repairs and maintenance and marketing.
The SABC’s cash on hand as at 31 March 2019 amounted to R 72 million – a decline of R 58 million from the balance of the prior year.
The SABC is technically insolvent
The SABC has revealed that it is technically insolvent and is struggling to honour payments to service providers and contractual obligations.
Some suppliers who have won bids at the SABC have indicated their unwillingness to take up the contracts due to their financial dire straits.
SABC Group Chief Financial Officer Yolande van Biljon said that the SABC’s financial position has worsened in recent months.
“There are instances where we are unable to honour payments and even [unable] to adhere to committed contracts,” she said.
“Currently, the organisation is technically insolvent. We are also under tremendous strain towards being factually insolvent as a result of our liquidity issues.”
Van Biljon said the crisis is a matter of urgency and certain terrible scenarios like a complete blackout remains a possibility.