SABC reports massive R1.1 billion loss

The South African Broadcasting Corporation (SABC) has tabled its 2022/23 Annual Report in Parliament, showing a R1.13 billion loss for the year.

The group noted that after seven years of improving net losses, the year under review saw a significant regression.

This resulted in a drop of 7.9% in revenue from the 2021/22 financial year and 27% less than budget.

It extended its losses by R949 million to R1.13 billion, while its cash reserves decreased by R709 million ( a drop of 60%), compared to the R300 million recorded in the previous year.

“The significant underperformance of revenue can be attributed to a variety of internal and external factors including but not limited to the growth in audience ratings that did not meet expectations, the impact of analogue switch off and load shedding, the inability to successfully monetise sport properties and other content and the increasing TV License evasion rate,” the broadcaster said.

In parallel, the unfunded cost of public service mandate, which was R817 million in 2022/23 financial year and government funding that comprises only approximately 3% of revenue streams also negatively impacted the financial results, it said.

Despite the bleak results, the SABC maintained that it has been delivering on its mandate – and dispute the “challenges”, continues to be a dominant force in the sector with millions of viewers and listeners.

It also noted the launch of its streaming app, SABC Plus, and the return of the METRO FM Music Awards as highlights during the year.

“While in its final year of implementation the SABC could report that nearly all the activities committed to in the Turnaround Strategy were implemented, the inability of the activities associated with revenue improvement and legislation to translate into improved financial results was a major setback,” it said.

It said that the utilisation of the bailout funding continued to be rigidly managed within the set allocation criteria for content and capex investments.

Going concern

The SABC said that due to the significant revenue gap that resulted in the increased net loss and the delayed financial benefit realisation of its 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.

“This is despite a 70% reduction in Audit findings over a 5-year period with significant improvement in financial controls. 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,” it said.

“With the onboarding of the new Board, after the Corporation was without a Board for six months, the Board has prioritised the stabilisation of revenue generation and various interventions that have or are being implemented,” it said.

“While these are gaining traction, the Corporation continues to manage its available resources conservatively to meet its financial obligations and continues to deliver on its public service mandate.”

Reflecting on Cabinet’s approval of the SABC Bill to be tabled in parliament, the group said that it anticipates “imminent positive developments in the legislative environment” – and with this, confidence in “turning the corner towards financial sustainability and growth”.

“The SABC is also excited about the opportunities SABC Plus holds, early successes with new content are yielding results and planning for the 2024 National Elections are on track.

“As such the Corporation is committed to intensifying its efforts in the execution of its mandate,” it said.

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