The SABC presented a rose-tinted picture of its financial health when it released its audited results this week, but the first five months of the current financial year show that the broadcaster is haemorrhaging cash at an alarming rate.
Acting CEO James Aguma and corporate affairs executive Hlaudi Motsoeneng downplayed a R411-million loss for the financial year that ended on March 31.
They blamed the loss on the global economic downturn, increasing pension costs and the burden of delivering a public service broadcasting mandate with scant government support.
Aguma also claimed that having R881-million in the bank in March and net assets of R2.7-billion meant going insolvent was out of the question.
What he didn’t say, however, is that matters have deteriorated dramatically in the five months since March.
Here is a raft of confidential financial documents, including an SABC treasury risk committee report for July, an income statement for August and an auditor-general’s report dated August 15, which lay bare the extent of the SABC’s financial crisis.
Here’s what the SABC doesn’t want the public and parliament to know:
- In the past five months, the SABC has lost a further R496-million. This is more than the total loss for the entire 2015-16 financial year;
- At the end of July, the SABC only had R245-million in the bank, despite its treasury warning that it “must have a cash balance of +-R650-million at all times to continue operations”;
- It’s understood that, by last week, cash reserves had dwindled to R200-million, which means that the SABC has burnt through more than R600-million in cash in five months;
- Audience ratings show the SABC’s share has declined from 49.3% in March to 47.4% in August against a target of 52%. Over the same period, e.tv and DStv both grew their audience share; and
- TV licence fee collection rates continue to decline.
- This is in addition to a R5-billion hole the auditor-general found in the SABC’s books.
The auditor-general lambasted the SABC for failing to hold anyone to account for this irregular expenditure.
Sources said the SABC was hiding an even worse cash balance by counting about R100-million in forward payments from MultiChoice.
Motsoeneng’s “un-researched and ill-considered” decision to impose a 90% local content quota “has impacted [on] the SABC’s performance”, said one source.
In response to questions about this, SABC spokesman Kaizer Kganyago said that during the results presentation Aguma had “made it clear that the SABC is not insolvent”.