SAA is deep in the kak.

Auditor-General Kimi Makwetu reported that South Africa’s national airline had suffered losses to the tune of R5,5 billion last year – much higher than the R 1,47 billion it reported in 2016.

Naughty.

According to IOL, Makwetu said yesterday that the “history of the losses, lack of working capital and volatility in foreign exchange controls” all created some deep uncertainty on the company’s ability to continue.

Speaking in Parliament, he gave SAA a “qualified audit opinion”, which means some of the airline’s records were unable to be located:

Makwetu said the lack of documents made it difficult for him to confirm the veracity of the assets and the inventory.

He said there were no records for irregular, fruitless and wasteful expenditure, and that there were many deficiencies in SAA’s finances:

“The government has made guarantees available and, subsequent to year end, as disclosed in note 49, recapitalisation funds to the extent of R10bn for utilisation by SAA,” said Makwetu [below].

“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,” added the auditor-general.

Makwetu explained that “the airline’s liabilities exceeded its assets by R17,8 billion – up from R12,3 billion in 2015/16”:

“As noted in note 50, 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,” Makwetu said.

He said maintenance costs were understated by R282million, trade and other payables were understated by R226m, provisions were understated by R135m and trade and other receivables were understated by R148m.

Six years of consecutive operating losses – here’s looking at you, Dudu Myeni.

All we can do now is hope to the high heavens above that Pravin Gordhan has the power to breathe some new life into one of our worst state-owned enterprises.

[source: iol]