NBC profitability far from near
The Namibian Broadcasting Corporation’s much talked about return to profitability might never become a reality within the next decade as 68% of its annual budget is spent on employment costs alone.
The high cost of salaries and wages for the national broadcaster leaves the company with only 32% to spend before considering other projects including buying programmes as well as transmission.
Worse, Chairman Sven Thieme this week concluded a key board decision that the ‘board finally resolved, given its fuduciary oversight of NBC to only consider granting final approval for any wage and benefit adjustments once we have received clarification on how the additional expenses will be funded by the shareholder’.
The shareholder, Government has already given NBC N$105m in operational expenditure, which is about N$2m - less than in it was in the 2010/11 finacial budget, according to Director General, Albertus Aochamub.
This as the company’s direct operational expenditure for broadcasting activities has increased by 5% to N$31.6m.
"On the upside, our overall employment costs have increased only marginally to N$142m.
This is because we have been able to affect some savings on overtime payments, which offset pay rises," said Aochamub.
While no large-scale retrenchments are in the pipeline, cutting corners will certainly become the order of the day to lift the burden on NBC’s budget.
“Being both a broadcaster and a production house means that we are always going to be people-intensive.
At this time, there are no large-scale retrenchments planned except for natural attrition and mutual separations with certain individuals,” explained Aochamub.
Nonetheless, Thieme has conceeded that the NBC is slowly making a recovery in the areas of financial management and generation of own revenue although a lot still needs to be done to complete the financial clean up exercise, while the management and Shopstewards Council have made good progress on the matter of salary and adjustments for 2012/13.
Although the company’s overall revenue is up by 9%, costs are marginally up by 3% (below average inflation of 7.1%), TV license revenue is up by 17%, asadvertising revenue is up by 4%, the NBC Chairman mantains that, “The continued historic underfunding of the operations of the corporation still hampers a sustained recovery.”
Pressed on what changes he has made since his arrival almost two years ago, Aochamub is content with the Corporation’s ability to now have an auditor.
Before him, NBC books had never been audited.
However, with regards to the improvement of content, Aochamub is calculative;
“We are focused on getting the business fundamentals right in the areas of financial management and discipline, cost containment, improving revenue and setting the business on a footing that would lessen dependence on public funding as the only source of income, first.”
“Give us the money and we will provide Namibians with new and exciting content.
The new additional channels we are planning on launching during early 2013 speak of the things that keep us awake at night and not a search for short-term popularity and favour with certain segments of society,” he pointed out, adding that despite financial shortcomings, the company is now confident that it can tackle the future on its own steam.