State-owned entity Sentech has averted a pending cash crisis by collecting more money and spending less, and ending the first half of its financial year in the black.
Sentech has recently faced a litany of woes, including a cash crunch and a lack of leadership. Its annual report for 2009/10, which was recently tabled in Parliament, indicates that the organisation faced high costs, marginal growth and no vision.
However, the state-owned enterprise has improved its cash position after focussing on collecting debt and cutting costs since May, says chairman Quraysh Patel. Sentech had R230 million in cash at the end of September and improved its operating margin from 7.7% to 27%. Its net profit margin improved from 13% to 32%.
Patel says the organisation has averted a possible cash crisis, which would have been the case had it not acted. He says the focus was on: "Spend less, collect more."
However, he says, this was not an easy task as the board had an acting COO, and no CEO or CFO. As a result, non executive board members, who fill an oversight function, had to tackle operational issues. "We had to move pretty fast to avert a crisis."
New head
Patel wants Sentech to be self-sufficient in the future. He was speaking after a press briefing called by Department of Communications Minister Siphiwe Nyanda this morning at OR Tambo International Airport.
Nyanda was briefing the media on recent quarterly meetings that took place between the department and the Sentech and South African Broadcasting Corporation boards.
Nyanda says a new CEO for Sentech should be approved by Cabinet early next month. He explains that 30 applications were received for the post, of which eight were identified, four short-listed and one person has since been selected. However, Nyanda says he first wants Cabinet approval before announcing Sentech's new CEO.
Sentech has been through several top-level ructions after a new board was appointed in April. COO Beverly Ngwenya replaced former CEO Sebiletso Mokone-Matabane, but subsequently resigned in the face of disciplinary action, while CFO, Mohammed Cassim, is currently on suspension pending a disciplinary process.
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