FBC record losses from 2010 to 2013

The latest Auditor General’s reports for government commercial companies highlights that out of the 15 entities audited, Fiji Broadcasting Corporation Limited, Rewa Rice Limited and Fiji Hardwood Corporation recorded losses in their operations.

The 2014 report which has been tabled in parliament highlights that the state owned broadcaster, FBC has been incurring losses for the last four years - $516,943 loss in 2010, $1.137 million loss in 2011, $7.1 million loss in 2012 and $5.6 million in 2013.

The Auditor General’s report states that the deficit of $342,887 for the shareholder’s equity in FBC’s Statement of Financial position indicate that the company does not have enough assets which stands at $22.4 million to match all FBC’s borrowing to external parties totalling $22.7 million.

The Auditor General said the major component of the liability is interest bearing borrowings of $19.4 million in 2013 guaranteed by the government.

The audit said that the losses reported for FBC for the past four years demonstrate high operating costs incurred especially as the result of the expansion of the company into the television business and the company’s inability to generate adequate revenue in addition to the government contribution to finance its business costs.

The Auditor General’s report said that the company may also need some expert review of its business operations to identify areas that may need to be streamlined to reduce its business costs.

Meanwhile the audit says FBC’s recorded net loss of $7.1 million in 2012 compared to a net loss of $1.13 million was mainly attributed to the increase in depreciation expenses from the upgrading works relating to the launch of the company’s TV services which were still in progress in 2011.

There were also increases in program expenses, motor vehicle expenses, salaries and wages and finance costs.

The 2013 net loss was $5.6 million.

Total expenditure for the state owned broadcaster in 2012 was $13.6 million while the expenditure for 2013 was $14 million.

The total income was $6.6 million dollars in 2012 and $8.4 million in 2013.

It has also been noted that the company accounts for all government grants received after 1st January 2010 as capital contribution.

This is a departure from International Accounting Standards accounting for government grants provided to compensate the company for expenses incurred to be recognized in profit or loss as other income on a systematic basis in the same period that the expenses are recognized.

Rewa Rice Limited recorded a loss of $54,497 in 2009 compared to a profit of $8,204 in 2008.

The loss is mainly attributed to the decrease in sales by $177,874.

For Fiji Hardwood Corporation, losses incurred in 2007 were $25.8 million and $1.9 million in 2008.

The net loss recorded by the Corporation resulted mainly from the changes in the fair value of forest assets.

12 government commercial companies have recorded growth or profits according to the 2014 Auditor General’s reports.

Airports Fiji Limited continues to record strong growth as it posted a $12.9 million profit in 2013 compared to $11.2 million in 2012.

This resulted mainly from an increase in total revenue by $1.1 million and a reduction in operating and finance expenses for the year.

The Fiji Electricity Authority made $32.5 million profit in 2013 compared to $75.3 million in 2012.

The reduction was mainly attributed to the increase in operating expenditure, specifically, fuel costs. 

Fiji Ports Corporation Limited and subsidiaries recorded a net profit of $13.7 million in 2013 which is an increase of $6.4 million compared to 2012.

The increase was mainly attributed to the improvement in other revenue collections by $6.5 million. 

The Fiji Ships and heavy Industries Limited recorded a profit of $1.08 million in 2013 compared to $965,998 profit in 2012.

The Fiji Development Bank recorded a consolidated operating profit of $4.8 million in 2014 compared to $5.5 million in 2013.

This is attributed to a decline in income received from interest from loans and reduction in fees.

PAFCO also recorded a profit in 2013.

Their profit stood at 2.1 million dollars in 2013 compared to a loss of $549,736 in 2012.

Housing Authority recorded a total comprehensive income after tax of $423,000 in 2013 compared to $523,000 in 2012.

The decline in comprehensive income by $100,000 was mainly due to increase in the cost of sales for the housing lots developed by the Authority.