SABC expects to stabilise over the next three financial years: Communications Dept

The SABC’s finances are expected to stabilise over the next three financial years. This is according to the Communications Department that briefed Parliament about the expected financial performances of some of the entities that report to it.

The briefing focused on the 2021/22 annual performance plan and budgets for the entities.

Communications Minister Stella Ndabeni-Abrahams told the Portfolio Committee on Communications that most of the public broadcaster’s revenue will be generated through advertising.

” We are urging the SABC to consider utilising financial ratios as a measure for liquidity and financial position. From a financial point of view, the total revenue is expected to increase by 28 %, 17 % and 13%  respectively for each of the financial years over the medium term. In the indication of the documents submitted this growth will be driven by advertising revenue that is expected to increase by 21 % between 2021 and 2022. Of course chairperson, in the documents they have detailed we are expecting to see an expenditure from R7 billion in 2021/2022 to R8,1 billion in 2023 to 2024. ”

SABC briefs parliament on its 2021/22 performance plan, budget:

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Reduced salary bill

The salary bill of permanent employees at the SABC is expected to decrease by R317 million over the 2021 and 2022 financial year. The public broadcaster has completed its Section 189 process in the past two months, with 621 permanent employees leaving the corporation. Ndabeni-Abrahams says this envisaged decline in costs includes other relevant expenses.

“Permanent employee costs are expected to decline by  R317  million in the 2021/2022 financial year. They are again making reference to signal distribution costs which are expected to decrease by four percent over the medium term and of course the review of signal costs with Sentech including the impact of switched off has not been factored into the budget process.”

SABC reports R511 million net loss for 2019/2020 financial year

Last year,  the corporation reported a net loss of R511 million, a 6% decline compared to the previous year, but a 20% better performance against budget.

“In a challenging economic environment, total revenue declined by 12% year-on-year to R5.7 billion. The decline can be attributed primarily to a decrease in advertising spend across the industry and the delay in finalising commercial partnerships on digital platforms. TV licence revenue has also come under pressure under difficult economic conditions for our audiences,” read a statement issued at the time.

The SABC also reported that the “total expenses were under budget” which they have attributed to cash flow constraints that led to a significant decline of investment in content, infrastructure, repairs and maintenance and marketing.

“There was a resultant 28% decline in content investment and a 16% decline in other operational expenditure,” said the SABC in the statement, although they were quick to caution that, “despite this, the Cost-to-Income ratio of 110%, remains completely unsustainable.”