SABC financial woes continue

The SABC told Parliament that South Africa’s ongoing economic troubles weighed on its hopes for a recovery in the 2020 financial year, subduing advertising and TV licence revenue.

The public broadcaster said due to South Africa’s ongoing depressed economic environment caused by the Covid-19 pandemic, clients continued to readjust their budgets and priorities and fourth-quarter revenue was below budget by R111.3 million, or 9%.

The executive summary of the SABC’s submission to Parliament’s Portfolio Committee on Communications on Tuesday stated that the ongoing Covid-19 pandemic still impacted advertising and clients’ approach into the quarter ended in March 2021.

“The revenue for the [fourth] quarter was almost identical to the prior … comparative period. Advertising and sponsorship revenue was below budget by 3% or R27.7 million for quarter four, and 0.5% more than [the previous year’s] revenue of R899.5 million,” the submission said.

TV licence cash revenue collected during the fourth quarter was R200 million against a budget of R293.7 million, resulting in a R92.9 million or 32% shortfall against budget. In comparison to the third quarter (R278.3 million), there was a decrease of R77.6 million (27.9%) in the fourth quarter.

“There was, however, a year-on-year increase of R40.8 million or 25.5% in TV licence revenue, a commendable improvement considering the economic constraints. Overall, year-to-date expenses were R871.3 million better than comparative prior period.”

Advertising and sponsorship revenue was below budget by 3% or R27.7 million for the fourth quarter, which was 0.5% more than prior year revenue of R899.5 million. Improved expenses were due to R358.4 million savings in operating expenses, a R157.3 million reduction in broadcasting costs driven by lower royalties from lower revenues, and a R501.5 million underspending in content amortisation.

“Employee compensation was R128.6 million more than budget due to severance packages of the [retrenchment] process. While the SABC’s fourth quarter’s financial performance was similar to the first quarter with a loss of R334.2 million, the loss was R58.3 million worse than the comparative period.” Irregular expenditure increased from the fourth quarter of the previous year by R21 million to R64.2 million due to incorrect evaluation criteria applied to bids.

Source: News 24