{"id":74980,"date":"2014-12-02T23:57:21","date_gmt":"2014-12-02T21:57:21","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=74980"},"modified":"2014-12-02T18:12:56","modified_gmt":"2014-12-02T16:12:56","slug":"are-sa-state-owned-companies-making-money","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/74980\/are-sa-state-owned-companies-making-money\/","title":{"rendered":"Are SA parastatals making money?"},"content":{"rendered":"

While South Africa’s state-owned companies are paying their top executives millions of rands in salaries and bonuses<\/a>, operationally and financially, its a mixed bag.<\/p>\n

BusinessTech looks at the financial performances of some of the country’s largest parastatals in the latest financial year, amid scandal and ongoing operational challenges.<\/p>\n

The figures below are taken from the latest available full year reports as published by the SOEs.<\/p>\n

Eskom – Profit<\/h3>\n

\"Eskom<\/a>Eskom reported a net profit of R7.1 billion for the year ended March 2014, up from R5.2 billion in the previous year.<\/p>\n

Revenue for the year increased to R139.5 billion from R128.8 billion in the previous year.<\/p>\n

Despite ending the financial year in the black, the power utility remains severely financially strained, with billions of rands still owed to it from non-paying municipalities. The group is said to need over R250 billion more in funding as it continues to battle load-shedding.<\/p>\n

The company also warned last month that it would need to trim its staff content.<\/p>\n

Telkom – Profit<\/h3>\n

\"Telkom<\/a>Telkom has spend the past year executing a turnaround strategy to bring the telecoms group back to profitability.<\/p>\n

In the financial year ending March 2014, the group managed to post an operating profit of R4.6 billion, from a prior loss of R11.15 billion in 2013.<\/p>\n

The improvement has come at a price, however, as the group has spent the past year downsizing its staff contingent – particularly at management level – and has faced opposition from unions at every turn.<\/p>\n

Rand Water – Profit<\/h3>\n

\"Rand<\/a>Despite “technical glitches” leaving thousands of South African homes without water earlier this year, Rand Water remains a profitable parastatal.<\/p>\n

The company posted a profit of just under R1 billion in the last financial year, off of revenues of R7.75 billion – up from R6.83 billion the year before.<\/p>\n

SAA – Loss<\/h3>\n

\"SAA<\/a>South Africa’s worst performing SOE, airline SAA posted a R1.17 billion loss in the latest financial year, up from a loss of R789 million previously.<\/p>\n

It is no secret that the national airline is in serious trouble, with management banking on a bailout from government to save it from going under.<\/p>\n

Sentech – Profit<\/h3>\n

\"Sentech<\/a>State owned\u00a0signal distributor, Sentech, received its first clean audit in over a decade for the 2012\/2013 financial year – the same year it posted a R177 million profit on R831 million in revenue.<\/p>\n

In the 2013\/2014 financial year, while revenue was up at the group (to R1.06 billion), profits were down (to R71 million).<\/p>\n

The group also faced strike action from workers in the year, demanding higher salaries.<\/p>\n

Transnet – Profit<\/h3>\n

\"Transnet<\/a>Rail, ports, and pipelines parastatal Transnet showed positive results for the 2013\/2014 financial year, recording a profit of R5.2 billion.<\/p>\n

Revenue grew to R56.6 billion, driven predominantly by a 14.2% increase in minerals and chrome volumes and a rise in automotive volumes and containers on rail.<\/p>\n

The group’s most recent performance is in stark contrast to its operations in the past, particularly in the mid-90s when the entity was on the brink of collapse.<\/p>\n

Despite its profitability, the group could not avoid a credit ratings downgrade along with all South African utilities in June 2014.<\/p>\n

Broadband Infraco – Loss<\/h3>\n

\"Broadband<\/a>State-owned broadband infrastructure company Broadband Infraco has always run at a loss – and according to its CEO, Puleng Kwele, without massive investment from government, it won’t post a profit any time soon<\/a>.<\/p>\n

In 2013, the group suffered a R181 million loss, according to its reports, following the trend of losses: R95 million in 2012; R206 million in 2011; and R40 million in 2010.<\/p>\n

Kwele has previously noted that the company would need R100 billion from government in order to meet its broadband infrastructure mandate.<\/p>\n

SABC – Profit?<\/h3>\n

\"SABC<\/a>South Africa’s public broadcaster has been mired by ongoing claims of corruption and maladministration for years.<\/p>\n

In it’s 2014 financial report, the group reported a R651 million profit after tax – however, most conversation from the group’s financials revolved around exorbitant salaries paid to the group’s controversial COO, Hlaudi Motsoeneng.<\/p>\n

The group received a qualified audit for the year, indicating more was at fault in the broadcaster ‘s financials than the reported R3.5 billion “irregular expenditure” noted by the auditor general.<\/p>\n

SAPO – Loss<\/h3>\n

\"SA<\/a>Cash-strapped and hit by labour strikes, the South African Post Office was described as being “in a crisis” this year.<\/p>\n

The group has been unable to combat the rise of technology and its impact on its main business (which accounts for 65% of its total revenue) – and hit such financial lows that, at a stage, it was uncertain whether the group could even pay salaries.<\/p>\n

SAPO is running at loss, finishing its last financial year R178 million in the red. Notably, the group also reported irregular spending of R2.1 billion.<\/p>\n

SA Parastatals revenue and profits\/loss<\/h3>\n
\n\n\n\n\n\n\n\n\n\n\n\n
Company<\/strong><\/td>\nRevenue<\/strong><\/td>\nProfit\/Loss<\/strong><\/td>\n<\/tr>\n
Eskom<\/td>\nR139.5 billion<\/td>\nR7.1 billion<\/span><\/td>\n<\/tr>\n
Transnet<\/td>\nR56.6 billion<\/td>\nR5.2 billion<\/span><\/td>\n<\/tr>\n
Telkom<\/td>\nR32.5 billion<\/td>\nR4.6 billion<\/span><\/td>\n<\/tr>\n
Rand Water<\/td>\nR7.75 billion<\/td>\nR997 million<\/span><\/td>\n<\/tr>\n
SABC<\/td>\nR7.07 billion<\/td>\nR651 million<\/span><\/td>\n<\/tr>\n
Sentech<\/td>\nR1.06 billion<\/td>\nR71 million<\/span><\/td>\n<\/tr>\n
SAPO<\/td>\nR5.7 billion<\/td>\n(R178 million)<\/span><\/td>\n<\/tr>\n
Broadband Infraco<\/td>\nR237.4 million<\/td>\n(R181 million)<\/span><\/td>\n<\/tr>\n
SAA<\/td>\nR27,1 billion<\/td>\n(R1.17 billion)<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n

More on state owned companies<\/h3>\n

State-owned company CEO salaries<\/a><\/strong><\/p>\n

Widespread corruption at SABC: report<\/a><\/strong><\/p>\n

SA Post Office fingered for R2.1 billion irregular expenditure<\/a><\/strong><\/p>\n

Former Eskom CEO paid far more than thought<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

While South Africa’s state-owned companies are paying their top executives millions of rands in salaries and bonuses, operationally and financially, its a mixed bag.<\/p>\n","protected":false},"author":10,"featured_media":74874,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[1876,1164,26,1675,667,3004,3957,65,2138],"class_list":["post-74980","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government","tag-broadband-infraco","tag-eskom","tag-headline","tag-saa","tag-sabc","tag-sapo","tag-soes","tag-telkom","tag-transnet"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/74980","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=74980"}],"version-history":[{"count":8,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/74980\/revisions"}],"predecessor-version":[{"id":75014,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/74980\/revisions\/75014"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/74874"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=74980"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=74980"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=74980"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}