Johannesburg – Friday, 29 September 2023 – The South African Broadcasting Corporation’s (SABC) 2022/23 Annual Report was tabled in Parliament today. Throughout the 2022/23 financial year, the SABC continued to deliver on its mandate to educate, inform and entertain, as well as consistently impact and improve the lives of South Africans. Despite the challenges with the funding model and external and internal factors that negatively impacted the financial results, it is encouraging that during this period, SABC video entertainment programmes formed part of the top 20 most watched programmes and SABC radio stations retained dominance with over 26 million listeners weekly according to the Broadcast Research Council (BRC).
In addition, amongst its key highlights the Corporation launched its first streaming App, SABC Plus, which signals a new digital era for the organisation and a key accomplishment in further addressing universal access for South Africans. During the year under review, the SABC also brought back a flagship property, the METRO FM Music Awards after a brief hiatus hosted in partnership with Mpumalanga Province.
After seven (7) years of consistently improving net losses, the year under review unfortunately saw a significant regression. This is as a result of revenue that was 7.9% less than 2021/22 financial year and 27% less than budget. The SABC made a net loss of R1.13b. This translates to a R949m more than the previous financial year. The cash reserves consequently decreased by R709m (60%) as compared to the R300m recorded in the previous year.
The significant under performance 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 loadshedding, the inability to successfully monetise sport properties and other content and the increasing TV License evasion rate. In parallel the unfunded cost of public service mandate, which was R817m in 2022/23 financial year and Government funding that comprises only approximately 3% of revenue streams also negatively impacted the financial results.
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.
This delayed the growth phase the Corporation was aspiring to achieve at this time. The utilisation of the bailout funding continued to be rigidly managed within the set allocation criteria for content and capex investments.
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. 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.
With the onboarding of the new Board, after the Corporation was without a Board for six (6) months, the Board has prioritised the stabilisation of revenue generation and various interventions that have or are being implemented. 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.
With the imminent positive developments in the legislative environment, the SABC is confident of 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.
Issued By: Group Communications
Media Enquiries: Ms. Mmoni Seapolelo (Acting Group Executive: Corporate Affairs and Marketing)
Seapolelomv@sabc.co.za | T. 011 714 3057 | C. 073 688 1590