SABC Achieves First Unqualified Audit in 14 Years Amid Financial Recovery and Strategic Growth Efforts

The SABC attributes its audit success to focused efforts on financial controls and institutionalizing good governance across the corporation.

The South African Broadcasting Corporation (SABC) has achieved a significant milestone by securing its first unqualified audit opinion in 14 years, as revealed in its 2023/24 Annual Report tabled in Parliament. This accomplishment, which reflects the public broadcaster's strengthened financial discipline and governance, is a major breakthrough for the institution that has faced numerous financial challenges in the past.

Financial Discipline Drives Progress

The SABC attributes its audit success to focused efforts on financial controls and institutionalizing good governance across the corporation. The corporation has consistently addressed areas that previously led to audit qualifications, thereby securing the unqualified opinion for the first time since the 2009/2010 financial period.

The SABC Group Chief Executive Officer, Nomsa Chabeli, highlighted this achievement as part of the SABC’s broader recovery strategy, which includes landmark accomplishments such as its highly praised election coverage, the successful relaunch and audience growth of the SABC+ streaming platform, and partnerships with leading global and local media houses.

“I am proud that the SABC has achieved another significant milestone on our journey of recovery, renewal, and growth," said Chabeli. "The SABC remains an iconic media institution in South Africa, continuing to be the most trusted media brand as we inform, educate, entertain, and empower our audiences.”

Financial Highlights and Challenges

Key financial improvements during the 2023/24 period include:

Advertising revenue increased by 7% compared to the previous year.

Total operating expenses decreased by 4%, reflecting improved expenditure management.

Loss before interest and tax decreased by 77%, dropping from R827 million in the previous year to R192 million.

The unfunded public interest mandate cost the SABC R834 million, for which securing government funding remains a top priority.

The SABC also showed progress in reducing its 10-year net loss before interest and tax, from a low of R1.1 billion in FY2017 to R192 million in FY2024. Year-on-year, the loss decreased by R634 million, underscoring the positive trajectory of its financial recovery.

CFO’s Perspective on Strategic Reforms

Yolande van Biljon, SABC’s Chief Financial Officer, emphasized the significance of achieving the unqualified audit, considering the ongoing financial sustainability challenges. “This reflects the strategic journey the SABC has undertaken to strengthen its internal control environment, compliance with legislation, and overall governance and oversight,” van Biljon said.

Audience Migration and Revenue Decline

However, the SABC continues to face challenges due to a decline in audience share, partly attributed to global trends of viewers migrating to streaming platforms. Since 2016, the SABC’s audience share has dropped from 46%, leading to a R2 billion decline in revenue. While revenue has remained flat since 2021, the corporation’s ability to grow its revenue streams remains constrained.

TV License Revenue Concerns

Another issue is the continued decline in TV license fee revenue, which has been exacerbated by non-compliance, reaching 85.6% in 2024. As more consumers shift to digital platforms, the relevance of TV license fees is increasingly questioned by both experts and the public. The SABC has rolled out various innovative initiatives to boost compliance, but economic hardships have made it difficult for households to prioritize this payment.

Future Outlook and Public Interest Funding

Moving forward, the SABC is focusing on developing new financial models to fund its public interest mandate. The broadcaster acknowledges that actuarial valuations since 2020 have impacted its equity negatively. The corporation's ability to meet its obligations in the next 12 months is uncertain, requiring austerity measures, including the suspension of 80% of its long-term capital plan and limiting investment in infrastructure and technology.

The SABC stated that its limited funding for capital investment poses a risk to innovation and future growth. Nonetheless, the unqualified audit represents a crucial step toward financial sustainability and operational excellence.