/ 10 October 2008

SABC reports drop in profit

The South African Broadcasting Corporation’s (SABC) 2008 operating profit has dropped from last year’s R182,8-million to R111,3-million.

However, its overall revenue increased by 10% to R4,7-billion, the SABC said in a statement on Friday.

The operating profit excluded the impact of pension and medical-aid costs, and profit after tax was R321,2-million.

This amount was due largely to the recognition of a R420,8-million pension-fund surplus, R144,5-million in costs to fund post-retirement medical-aid obligations, and an R89,4-million contribution to a pension fund.

In 2007, profit after tax was R192,8-million.

Commercial advertising for the SABC grew by 14% to R3,1-billion, and advertising in general accounted for 81% of total revenue.

Although R568-million was generated out of commercial revenues, contributions through sponsorships had dropped by 9% from 2007. ”This was due to the decrease in aired sports events following the loss of rights to broadcast games in the Premier Soccer League.”

Television licence revenue grew by 8%.

The corporation said it lost R76-million due to programming rights it bought, but then never broadcast within the licensed period.

Staff costs also rose through salary increases, reclassification of freelance payments from general to staff payments, and hiring of new staff.

The SABC said R40,6-million during the year was classified as ”wasteful” spending in terms of the Public Finance Management Act (PFMA). ”The corporation is now attempting to recover this expenditure.”

The SABC said an overhaul in its accounts system means it is now reauditing all spending and amortisation of its more than 4 000 programming projects. This process was not completed in time for a sign-off of financial results.

It is also involved in a number of litigation processes, including the Public Investment Corporation over Bophuthatswana Broadcasting Corporation premises and a R140-million claim from a supplier.

The corporation said it has little debt and R165,6-million on its balance sheets, leaving it in a ”solid cash position”.

Local content also increased on the SABC this year. On SABC1, local content increased by 16%, and by 7% on SABC2. On its radio stations, 60% of music was local.

The corporation said it had purchased four high-definition outside broadcast vans to be used during the 2009 Confederation Cup and the 2010 Soccer World Cup. — Sapa