SABS improves financial performance during Administration

SABS improves financial performance during Administration

The South African Bureau of Standards (SABS), which was placed under Administration in June 2018, presented its integrated annual report to the Parliamentary Portfolio Committee on Trade and Industry today.

“In the year under review, the report indicates that there has been significant improvements in governance, policy, financial and operational performance at the SABS.Although SABShas produced better results than the previous year, the outlook for the next financial year remains challenging and the SABS must continue to deliver on its turnaround strategy”, said Garth Strachan, Acting CEO of SABS.

Thenettloss of R4.4 millionfor the year reflected a significant improvement from the nettloss of R70.7 million achieved in the prior year, whilst the operating loss for the year decreased by 56.7% from R79.5 million in the 2018/2019 financial year to R34.4 million for the year under review. The 2018/2019 financial results were audited by the Auditor General of South Africa. The SABS received a Qualified Opinion, an improvement from the Disclaimer opinion issued in the previous year.

“While a further deficit is currently projected for the 2019/20 financial year, SABS will continue to invest in therefurbishment and replacement of essential equipment and facilities, as well as the filling of critical human resources. This planned expenditure is required to increase revenue, maintain operational stability and position the organisation for future growth in a competitive environment. Even though SABS receives a grant from the dti, approximately 70% of its revenue is derived from competitive services in a commercial market,” said Strachan.

Other performance improvements that contributed to a better set of results included the reintroduction of testing to customer specific requirements (partial testing); thefirst investment of R21.6 million in critical laboratory equipment and facilities upgrades as part of a broader R400 million multi-year investment programme; and provision of local content verification for both the public and the private sector.

SABS is responsible for the development, promotion and maintenance of a system of national standards in order to enhance the competitiveness of industry and protect the quality of life of citizens. In the year approximately 7 400 SANS were maintained through a process of review and amendments where necessary, whilst SABS published 240 new South African National Standards (SANS), of which 130 were locally developed.

The work in standardisation was highlighted by SABS hosting the General Assembly of the International Organization for Standardization (ISO) in September 2019, in Cape Town. The ISO event was attended by 800 representatives from 134 national standards bodies from across the globe. During the ISO week, SABS convened a meeting of African standards bodies to take forward preparations for the harmonisation of Standards which will be an indispensable component of the African Continental Free Trade Area agreement (AfCFTA).

Strachan emphasised: “The standards value chain - from standards development and setting, to certification, testing, consignment inspection and local content verification – is a vital pillar of the industrial effort of any country. Quality assurance for services and products is a critical measure of competitiveness in the domestic market and as a measure of quality for South African products and services in export markets.”

“Although a solid foundation has been laid by the Administrators, there is much work that remains to be done, particularly in the context of disruptive technological change driven by the digital or fourth industrial revolution, to return the SABS to optimal operational efficiency and as a pillar of support to private and public sector companies in the domestic economy.” concluded Strachan.