3rd QUARTER REPORT
FOR YEAR ENDING MARCH 31 2015
PORTFOLIO COMMITTEE ON TELECOMMUNICATIONS AND POSTAL SERVICES
17 MARCH 2015

Performance Overview
SENTECH is pleased to present the results for the Q3 that ended December 2014 to the
Department of Telecommunications and Postal Services.
Overall Performance
Quarter 3 Statement of Comprehensive
Income
300 000
250 000
200 000
150 000
100 000
50 000
0
Normal revenue
Once-Off
Revenue
Total expenses
EBIT Net finance income
Earnings after taxation
Actual Budget Variance
3

Pre-Determined Objectives
SENTECH is pleased to present the results for the Q3 that ended December 2014 to the
Department of Telecommunications and Postal Services.
Overall Performance
4

KPI
Number of VSAT terminals installed
Number of public sector ICT infrastructure services installed/enabled through CSI programme
Customer and stakeholder service index
Annual
Target
135
14
Baseline +
5%
Target
90
9
Baseline + 5%
YTD
Quarter Variance Explanation
Actual
39 (Ethniks 38,
Centlec 1,)
7
One of the key solutions driving this target is the roll out of the Ka Band frequency which is currently not yet completed.
A process to provide VSAT terminals to community broadcasters is currently underway and is expected to be completed by March 2015.
A listing of additional schools has been received from
DTPS. An implementation plan is in place to install
VSAT at the remaining schools.
No performance conducted
The focus during this quarter was on implementing the recommendations from the previous survey.
The procurement process is currently underway to appoint a service provider to perform the survey in the current financial year. This process is expected to be completed by March 2015.
Percentage of training implementation plan achieved
(Interventions to address identified critical skills gaps)
80% 60% 50.90%
The reasons for the variance include, the postponement of certain courses as well as delayed procurement. A dedicated resource to assist with the finalisation of the procurement ( requisitions and follow up on purchase orders) as well as scheduling of training has been appointed in November.
The scheduled training interventions will be monitored on a weekly basis to ensure the achievement of the annual target.
5

R'000
Revenue
Cost of Sales
Gross Profit
Overheads
Operating expenses
Administrative expenses
Selling expenses
Profitability Per Service (Year-to-date)
FM MW SW DTH
Facility
Rental VSAT TV
(401 064)
130 053
(271 011)
(177 964)
97 092
(80 872)
(6 581)
6 453
(128)
(20 092)
17 433
(2 659)
(70 718)
107 612
36 894
(39 146)
9 899
(29 247)
(9 440)
22 171
12 731
96 550
23 247
70 732
2 571
48 827
14 102
32 918
1 807
2 224
618
1 337
269
5 675
1 147
4 313
215
18 273
4 385
12 684
1 204
9 135
2 096
6 640
400
4 092
1 248
1 988
856
Earnings before interest & tax
Television
Radio
DTH
Rental
VSAT
(174 460) (32 045) 2 097 3 016 55 167 (20 111) 16 823
There was positive growth of 2% above budget:
• Establishment revenue of 2 Low Power sites namely Makgaung and Ga Mafefe.
• Successful DTT rate card negotiations with MNET, e.tv and TBN.
• FM, MW & SW have realised revenues above budget for the YTD.
• However, as reported in previous quarters, FM is experiencing challenges on 3rd Party site acquisition and has impacted the delivery schedules for community broadcasters.
There has been an improvement on DTH with the following customers launched in Q3:
• Multichoice contracted 70 Mbs, Teach Every Nation (TEN) and Enlightened Christian Gathering
(ECG) TV launched their new services.
Revenue is 22% below budget on a YTD basis.
• A new facility rentals’ tariff was approved and discussed with Cell C, Vodacom, Comsol and
Netstar .
VSAT is slightly above budget with less than budgeted losses reported due to the following:
• Mainly the budgeted cancellation of the KZN DoE did not materialise.
6

Financial Statements
Statement of Comprehensive Income and Ratio Analysis
Statement of Comprehensive Income (R’000) summarised:
Variance Analysis
• The positive performance on EBIT was driven by: o Once-off recoveries of Mandela funeral costs and DTT Dual illumination costs ; and o lower than expected operational expenditure primarily driven by:
 lower spend on discretionary cost items, such as professional and consulting, corporate communication .
• As a result of the improved EBIT, the annualised Return on Net Assets (RONA) as at Q3 FY2015 is projected at 12.82% against a target of 6%.
7

GRANT Funds - CAPEX Report

Kuruman Hills – 14 October 2014

Springbok – 30 October 2014

Garies – 31 October 2014

Upington – 18 November 2014

Upington Town – 5 December 2014

Piet Retief – 12 December 2014

De Aar – 18 December 2014

Pomfret – 18 December 2014
83.62%
53.89%
8

DTT Project Status Report – 27 February 2015
Province
Free State
Gauteng
Kwazulu Natal
Limpopo
Mpumalanga
North West
Eastern Cape
Northern Cape
Western Cape
Total
Total
33
17
35
178
13
12
29
10
13
16
Existing Sites
Complete In Progress
13 -
12 -
29
10
13
16
-
-
-
-
33
17
34
177
1
1
-
-
Napier
Greenfield sites
% Completed
100%
100%
100%
100%
100%
100%
100%
100%
97.1%
99.4%
1 Harrismith
1 Burgersfort
2
Holy Cross
Ngqeleni
4
9

Headcount and Resourcing
The graph reflects staff complement against the approved
HUMAN RESOURCES
● 17 appointments were made (internally and externally) of which 88% are black and 41% were black females.
Staff Turnover
Sentech’s turnover rate for Q3 was 1.9%, comprising 0.9% resignations and 1% involuntary terminations (death/retire). Only 1 black female resigned during the quarter.
Skills development
Cumulative achievement of 50.5% of the annual target of
1664 planned interventions was achieved compared to the
38% achievement in the previous quarter.
10

FY2010 FY2011 FY2012 FY2013
Qualified Unqualified Unqualified Unqualified opinion (with other (with other (Clean)
Corporate Governance –
Audit Outcome & Progress
FY2014
Unqualified
(Clean)
● Management developed an Audit Action Plan addressing all admin issues.
● EXCO monitors Audit Action Plans – Monthly basis.
● Audit Committee monitors progress on a quarterly basis.
11