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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 licenses were paid for during the period.
The issuer reported a net loss of R511 million, a decrease of 6% compared to the previous year.
Total revenue amounted to R5.7 billion, a decrease of 12% year-on-year.
The SABC blamed this drop on a decrease in advertising spending in the industry and the delay in finalizing its commercial partnerships on digital platforms.
Additionally, its television licensing revenues have come under pressure during what it called “tough economic conditions for its audiences.”
“Television license revenue declined 18% year-on-year to R791 million due to the delayed use of debt collection agencies in this period,” SABC said.
“This resulted in only 24% of the total license fees invoiced being realized as revenue, compared to 31% for the year ended March 31, 2019.”
The broadcaster reaffirmed that, as part of a general policy review, it is currently finalizing proposals for the government on the future collection of a tax on public broadcasting, taking into account the different opinions of the public on this issue, as well as best international practices.
Reduce expenses
SABC’s total expenses for the year were under budget by 23% or R1.8 billion.
However, it acknowledged that this was due to cash flow constraints that led to a significant decrease in investment in content, infrastructure, repairs and maintenance, and marketing.
“There was a resulting 28% decrease in investment in content and a 16% decrease in other operating expenses. Despite this, the cost-income ratio of 110% remains completely unsustainable, ”said SABC.
Cash on hand improved significantly from R73 million as of March 31, 2019 to R100 million as of March 31, 2020.
Big drop in wasteful spending
The SABC further stated that it has continued to improve its internal controls to ensure that governance is restored in the organization.
“Year-over-year wasteful and unsuccessful expenses decreased by 87% to R27 million, with R26 million incurred for interest and penalties due to late payments caused by cash flow restrictions,” SABC said.
There was also a 40% decrease in irregular expenses from year to year amounting to R202 million, compared to R336 million for the year ended March 31, 2019.
“The key to this was monitoring and oversight by the Board, IT governance, risk management, internal auditing and record keeping,” the broadcaster said.
“The Corporation’s Supply Chain Management environment still needs to be strengthened and actions are being taken in this regard,” said SABC.
He added that he will continue to implement his restructuring plan with purpose and commitment.
“While the pandemic will have a significant impact on the financial sustainability of the issuer in the short term, the Corporation remains confident that it is on track to meet its objectives.”
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