Johannesburg – The financial hole at state-owned enterprise SAA is R1 billion deeper than it was revealed last week.
The interim results, which were not the final results, last week showed a loss of R4.67bn. The board met on Sunday to approve the results.
However, yesterday SAA executives and the board revealed a shock increase in Parliament, showing its financial loss in the 2014/15 financial year was R5.6bn.
The airline complained to MPs of compressed revenue and a tough trading climate.
Deputy Minister of Finance Mcebisi Jonas said the changes to the results from last Thursday were due to technical issues raised by auditors. He admitted to MPs that the results were overdue.
“Section 55 of the Public Finance Management Act requires state-owned entities to submit their financials within five months of the end of their financial year,” he said.
The results could not be tabled in Parliament by Finance Minister Pravin Gordhan a year earlier because he had not granted the airline the R5bn loan guarantee to continue to operate as a going concern.
In the financial statements presented by the executives, they said one of the factors that contributed to the R5.6bn loss was the issue of impairments.
Acting chief financial officer Phumeza Nhantsi said the R5.6bn loss was much higher than the R2.5bn loss the airline suffered in 2013/14.
She told MPs that the revenue was flat and the airline was battling to survive in a tough industry.
Most of the operating expenses were in foreign currency, which impacted on SAA’s finances.
Nhantsi said in Africa SAA was now competing with a number of low-cost airlines. She said in 2015/16 SAA had posted a loss of R1.4bn. She would not describe this as an improvement because it was still a huge loss. Operating costs have come down because the price of Brent crude dropped by 34 percent.
“Looking at the balance sheet of SAA, it is very weak. We will see what we will do with management and the shareholder,” Nhantsi said. She said in the first quarter of 2016 SAA had made savings of R181 million.
Opposition MPs said they had been shocked at the increase in losses from R4.67bn to R5.6bn.
Nhantsi said SAA had cut down on some of the loss-making routes, including Mumbai and Beijing.
SAA also dropped the Abu Dhabi route because of losses. It had decided to increase the number of flights in Africa where there were profitable routes. This included Libreville in Gabon, Cotonou in Benin and Brazzaville and Pointe Noire in the Congo.
The carrier hoped SAA would be able to generate revenue in these areas. It also said that in the first quarter of 2016 it had not achieved all its targets, and was sitting at 60 percent of its targets.
Jonas said the board would be able to table the final results in Parliament on September 30, which is the deadline for all departments and entities to table their financials in the national legislature.