SABC reports R1.13 billion loss
The SABC tabled its 2022/2023 annual report in Parliament on Friday, 29 September 2023, revealing a loss of R1.13 billion.
The loss is R949 million more than the public broadcaster recorded in the previous financial year and appears to be the worst in the SABC’s history, at least since the start of the century.
“After seven years of consistently improving net losses, the year under review unfortunately saw a significant regression,” the SABC stated.
“This is as a result of revenue that was 7.9% less than 2021/22 financial year and 27% less than budget.”
As a result of this deterioration, the broadcaster’s cash reserves dropped by R709 million, 60% of its total cash reserves. In the previous financial year, it increased cash reserves by R300 million.
The SABC said the underperformance of revenue could be attributed to a variety of internal and external factors, including:
- Growth in audience ratings that did not meet expectations
- The impact of the analogue switch-off in certain provinces
- The impact of load-shedding
- The inability to successfully monetise sport properties and other content
- The increasing TV License evasion rate
It also said it had spent R817 million on its public service mandate in the 2022/23 financial year, while the government had only contributed approximately 3% of revenue streams.
However, government did provide a bailout of R3.2 billion to the SABC in 2021.
“Due to the significant revenue gap that resulted in the increased net loss and the delayed financial benefit realisation of the turnaround strategy, the Auditor General of South Africa concluded that material uncertainty of the SABC’s ability to maintain its Going Concern status exists and is so pervasive that a Disclaimer Opinion was issued,” the SABC said.
However, a “Disclaimer Opinion” means that the SABC provided insufficient evidence in the form of documentation on which the Auditor-General could base an audit opinion.
“The lack of sufficient evidence is not confined to specific amounts, or represents a substantial portion of the information contained in the financial statements,” a definition of the opinion states.
This is worse than a qualified audit or even an adverse opinion from the Auditor General, where it found specific misstatements of fact.
Despite the Auditor General’s finding, the SABC said there had been a significant improvement in financial controls, with a 70% reduction in audit findings over five years.
“There are no audit qualifications remaining in 2022/23 financial year related to the preparation of and fair presentation of the financial statements and the internal control environment,” the SABC said.
The past financial year was the final one in the broadcaster’s turnaround strategy.
The SABC said that nearly all the activities committed to in the strategy were implemented, but the inability of the activities associated with revenue improvement and legislation to translate into improved financial results was a major setback.
“This delayed the growth phase the corporation was aspiring to achieve at this time,” the broadcaster said.
It maintained that its bailout funding remained “rigidly managed within the set allocation criteria for content and capex investments”.
The SABC said that the “imminent positive developments” in the legislative environment made it confident it would turn the corner towards financial sustainability and growth.
That statement likely refers to the Cabinet recently approving the submission of the South African Broadcasting Corporation (SABC) Bill of 2023 to Parliament.
While its entire content is unknown, it includes changes to the broadcaster’s TV Licence scheme, which may consist of the scrapping of the SABC TV Licence in favour of a household levy.
Government’s exact plan will only be revealed once the legislation is tabled in Parliament.
“The amendments will strengthen the efficiency of the operations of the public broadcaster,” the Cabinet said in a statement on Wednesday.
The amendments will first be debated in Parliament and opened to public comment before the Bill is signed into law.
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