Picture: Michel Bega
South Africa’s state-owned broadcaster SABC has revealed it is technically insolvent, as it suffered a loss, before interest and tax, of R192 million.
The SABC revealed this while tabling its 2023/24 annual report in Parliament.
SABC’s CFO, Yolande van Biljon, said she is uncertain if the broadcaster will be able to meet its financial obligations in the next 12 months.
Van Biljon added that its audience share has been hurt by more and more South Africans using global streaming platforms.
“A decline in audience share is illustrated by the R2 billion decline in revenue since fiscal year 2016, while revenue year on year has remained mostly flat since fiscal year 2021.”
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Another challenge experienced by the entity is a decline in TV licence fee revenue. Van Biljon said this is despite numerous initiatives that the broadcaster rolled out.
“Levels of licence fee non-compliance have continued as households afford it a low priority in times of economic hardship and the reality is also that compliance cannot be enforced,” she said.
The non-compliance rate increased to 85.60% in fiscal year 2024. “Going forward, focused attention will continue to be directed towards new equitable financial models for funding the SABC’s public interest mandate.”
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“The impact of actuarial valuations on post-employment benefits since fiscal year 2020 has given rise to the negative equity reported in the Statement of Financial Position as of 31 March 2024.”
The negative equity is one of the factors contributing to SABC’s technical insolvency. An entity becomes technically insolvent when it is unable to meet its financial obligations; or when the total liabilities exceed total assets.
“It must be noted that virtually no funding is currently available for any capital investment in innovation, infrastructure and technology,” said Van Biljon.
Despite the challenges that the SABC has experienced, it has, for the first time in 14 years, received an unqualified audit opinion.
The key findings covered in the SABC’s annual report included it being able to lower operating expenses compared to previous years and an increase in its advertising revenue.
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