A presentation by the SABC to a parliament has painted a grim picture of a broadcaster at real risk of finding itself, once again, in financial difficulty.
Overall, revenue is below budget by 27%, or R1-billion, year to date, chief financial officer Yolande van Biljon told MPs earlier this week in a sitting of the portfolio committee on communications.
The presentation, which TechCentral has seen, shows the SABC currently expects to produce a “de-risked” net loss for the year to March 2023 of R608-million. That compares to a budgeted profit of R64-million — a huge swing in performance that the company is highly unlikely to be able to make up before year-end.
The public broadcaster has blamed an unwillingness by South Africans to pay television licence fees, a shrinking primetime audience and underperforming advertising revenue for the projected loss.
The decline in viewership squares with recent remarks by commercial free-to-air rival eMedia Holdings, which owns e.tv, that it has recently made significant market share gains in the terrestrial television market.
The SABC told parliament that savings that had been expected from analogue switch-off have also not materialised, with signal distribution costs being higher than budgeted for.
A delay in billing for carriage licence fees for its channels on streaming platform Telkom One also contributed to the deteriorating financial position. The SABC recently took over Telkom One and rebranded it as SABC+.
Meanwhile, amortisation costs are expected to be above budget, mainly due to the purchase of rights to broadcast games from the 2022 Fifa World Cup in Qatar.
The picture, the SABC said in its presentation slides, is “very dim”. All initiatives to address the poor revenue performance have been delayed, it said, and “may not yield any positive returns for the corporation in the 2023 financial year”.
In one of the slides, the company said that “downsizing the business by halting non-critical capital spend and some operating expenditure will be required in the short term”.
It will also seek to renegotiate payment terms with creditors to “avoid interest being levied on outstanding debts”. It added, however, that unless otherwise negotiated, payments to suppliers will be made within 30 days of invoice, “particularly so for small, medium and micro enterprises”. – © 2022 NewsCentral Media