SABC TV Licence mess – Only 24% of South Africans paying

The SABC has published its annual report for the 2019/2020 financial year in Parliament on Tuesday, revealing that less than a quarter of TV Licences were paid over the period.

The broadcaster reported a net loss of R511 million, a 6% decline when compared with the previous year.

Total revenue amounted to R5.7 billion, a decline of 12% year-on-year.

The SABC blamed this drop on a decrease in advertising spend across the industry and the delay in finalising its commercial partnerships on digital platforms.

Additionally, its TV licence revenue has come under pressure during what it labelled as “difficult economic conditions for its audiences”.

“TV licence revenue declined by 18% year-on-year to R791 million due to the delayed use of Debt Collection Agencies in this period,” the SABC said.

“This resulted in only 24% of the total licence fees billed being realised as revenue, compared to 31% for the year ended 31 March 2019.”

The broadcaster reaffirmed that as part of an overall policy review, it is currently finalising proposals to the government on the future collection of a public broadcasting levy, taking into account differing public views on this issue as well as international best practice.

Cutting expenses

The SABC’s total expenses for the year were under budget by 23% or R1.8 billion.

However, it acknowledged this was due to cash flow constraints that led to a significant decline of investment in content, infrastructure, repairs and maintenance, and marketing.

“There was a resultant 28% decline in content investment and a 16% decline in other operational expenditure. Despite this, the Cost-to-Income ratio of 110%, remains completely unsustainable,” the SABC said.

Cash on hand saw a marked improvement from R73 million as at 31 March 2019 to R2.1 billion by 31 March 2020.

Big drop in wasteful expenditure

The SABC further claimed it has continued to improve its internal controls to ensure that governance is restored in the organisation.

“Year-on-year fruitless and wasteful expenditure decreased by 87% to R27 million, with R26 million of that incurred from interest and penalties due to late payments caused by cash flow constraints,” the SABC said.

There was also a 40% decline in year-to-year irregular expenditure amounting to R202 million, compared to R336 million for the year ended 31 March 2019.

“Key to this was the monitoring and oversight by the Board, IT Governance, Risk Management, Internal Audit, and record-keeping,” the broadcaster said.

“The Corporation’s Supply Chain Management environment still requires strengthening and actions in this regard are underway,” the SABC stated.

It added that it will continue to implement its turnaround plan with purpose and commitment.

“While the pandemic will have a significant impact on the broadcaster’s financial sustainability in the short term, the Corporation remains confident that it is on track to deliver on its objectives.”

Now read: SABC TV Licence plan is “insane” and “parasitic”

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SABC TV Licence mess – Only 24% of South Africans paying