For the first time since the FY2009/2010 financial period, the South African Broadcasting Corporation has received an unqualified audit opinion, a “significant milestone”, the SABC said.
The SABC’s 2023/24 Annual Report has been tabled in Parliament. The 10-year trend reflected the net loss before interest and tax, having improved from a low of R1 1143 million in FY2017 to R192 million in FY2024. In addition, the loss before interest and tax decreased by R634 million year-on-year between FY2023 and FY2024.
“I am proud that the SABC has achieved another significant milestone on our journey of recovery, renewal and growth. Our unqualified audit opinion follows on a number of recent achievements including our much-lauded election coverage, the relaunch and rapid audience growth of our SABC+ streaming platform as well as our content partnerships with leading global and local media houses,” said Nomsa Chabeli, group chief executive officer.
“The SABC is an iconic broadcast media asset in South Africa, with the largest audience and geographic reach. Reinvigorated and focused behind our new 2025-2030 strategy, we continue to be South Africa’s most trusted media brand as we entertain, educate inform and empower our audiences,” she added.
No 1 for news
The SABC has fought to build a reputation for neutrality and impartiality, and Chabali believes this was comprehensively demonstrated during its extensive and widely praised coverage of the 2024 national elections.
“The SABC is a vital foundation for democracy in our country, reliably offering up sustained coverage of a diverse range of political viewpoints and perspectives,” said Chabeli.
To demonstrate the power of the news and current affairs division, the top 10 news broadcasts in the country all came from SABC News, indicating South African people’s preference for receiving news and for expressing themselves in their own languages.
The dedicated SABC News channel was recorded as the No. 1 news channel (FTA and Satellite) during the year under review and attained one billion+ SABC News YouTube channel views.
Key financial highlights during this period
- An increase of 7% of advertising revenue from the previous financial year
- A decrease of 4% of total operating expenses when compared to the prior year
- A decrease of 77% of the loss before Interest and tax of R192 million from R827 million in the previous year, and
- The cost of the unfunded public interest mandate is estimated to be R834 million. Securing government funding for this mandate remains an important priority for the SABC and is an important priority area in the SABC Bill currently under review.
“Despite financial sustainability challenges, the Corporation executed its mandate diligently and passionately. Achieving an unqualified opinion, a first in 14 years, reflects the strategic journey the SABC has undertaken to strengthen its internal control environment, its compliance with legislation, expenditure management, governance and oversight,” said chief financial officer, Yolande van Biljon.
In a statement, the SABC said its unqualified audit opinion was made possible by focused attention to financial disciplines and to institutionalising good governance throughout the Corporation. The success of this process is evidenced by the number of audit qualification areas that have been successfully addressed and consistently adhered to.
Streaming impact
The SABC’s audience share has been impacted by the migration of audiences to global streaming platforms. A decline in audience share from a high of 46% in FY2016 continues to negatively impact the SABC’s ability to grow its revenue streams.
This is illustrated by the R2 billion decline in revenue since FY2016, while revenue year on year has remained mostly flat since FY2021.
The decline in TV license fee revenue is another challenge, as it continues on a downward trajectory despite numerous innovative initiatives that continue to be rolled out. As audiences migrate to consuming content across a range of screens other than television screens, the relevance of this form of license fee continues to be questioned media experts as well as by the public.
Levels of license fee non-compliance have continued to decline as households afford it a low priority in times of economic hardship and the reality is also that compliance cannot be enforced. The non-compliance rate increased to 85.60% in FY2024. Focused attention will continue to be directed towards new equitable financial models for funding the SABC’s public interest mandate.
Obligations for next 12 months
The impact of actuarial valuations on post-employment benefits since FY2020 has given rise to the negative equity reported in the Statement of Financial Position as of 31 March 2024.
The SABC’s ability to meet its obligations in the next 12 months remains a material uncertainty and requires the ongoing implementation of severe austerity measures including but not limited to the suspension of more than 80% of the long-term capital plan and a limitation of investment in content. It must be noted that virtually no funding is currently available for any capital investment in innovation, infrastructure and technology.
In the year under review, financial constraints hampered efforts to fully meet mandate content delivery for linear television. However, the overall offering, appeal and reach of SABC content remains strong. The relaunch, strong audience growth and exciting future plans for the development of the SABC Plus streaming platform continues to be a positive indicator of future success.
Radio and CSI
In terms of the radio portfolio, all SABC radio stations achieved 100% of genre quotas and 100% local music quotas, as set by the Independent Communications Authority of South Africa (ICASA).
The Corporation also played a pivotal role as a social entity within the diverse South African communities that it serves. During the period under review, the SABC’s Corporate Social Investment (CSI) prioritised fulfilling its core mandate of giving back to society through its strategic partnerships with SABC platforms and non-governmental organisations (NGOs).
These collaborations were in response to an escalating need for public awareness and targeted information around various challenges that threaten social stability, such as gender-based violence, rape, poverty and child-headed households.
A total of R15.2 million worth of airtime was invested in Public Service Announcements (PSAs) to assist NGOs in disseminating messages aimed at creating awareness and empowering citizens with valuable information.
Chairperson of the Board, Khathutshelo Ramukumba, said, “As the Board we are grateful for the support that the public and the multitude of stakeholders we engage with, have given the public broadcaster throughout the FY2023/24.
“To fulfil a public mandate as demanding as the SABC’s is not an easy task and we can assure the South African public that the hard work and dedication by the Executive management and all staff members has begun bearing fruits. We are confident that as we continue to implement business enabling strategies and further capacitate key divisions within the business, we will continue to show a steady improvement.”
