SAA as going concern doubtful – AG report | Fin24
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SAA as going concern doubtful – AG report

Mar 08 2018 17:55
Lameez Omarjee

Cape Town - State airline SAA incurred a net loss of over R5bn according to the auditor general’s report which was tabled in Parliament.

The Auditor General (AG) on Thursday tabled the audit reports for both SAA and its subsidiary Mango for the 2016/17 financial year. Both airlines received qualified audit opinions.

In the report Auditor General Kimi Makwetu flagged the airline’s going concern. SAA incurred a loss of R5.57bn and its liabilities exceeded assets by R17.8bn.

“Six consecutive years of operating losses have further eroded the capital base and this continues to impact on the entity’s ability to operate in a highly demanding and competitive environment,” he said.

“The history of losses, lack of capital and volatility in foreign exchange rates, along with maturing loans and working capital deficiencies, indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern.”

SAA has not yet tabled its financial report to Parliament and has been given an extension until the end of April to do so.

The airline also delayed the submission of its financial statements to the AG, and only did so on October 31, 2017, Makwetu said in the report.

This delayed the auditing process and the audit report. The AG eventually issued the report to SAA’s accounting authority on December 8 2017.

The DA plans to write to Finance Minister Nhlanhla Nene requesting him to release SAA’s financial report as a matter of urgency, MP Alf Lees said in a statement issued on Thursday.

“It is odd that the Auditor General has chosen to table the audit reports in Parliament, which is a complete departure from standard practice where audit reports are released as part of annual reports,” he said.

The AG’s report gives reasons for the qualified opinion. Among these being that SAA failed to maintain complete records of irregular expenditure and fruitless and wasteful expenditure. The same is true for Mango.

The AG also raised issued with SAA's records of  property, aircraft and equipment and inventory.

SAA is yet to respond to Fin24's queries.

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mango  |  saa  |  results  |  audit report  |  auditor general


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