Africa’s largest pay TV provider continues to falter, reporting a more than 100% drop in full-year earnings to March 2025 and blaming the plunge on cash-strapped consumers, foreign exchange losses and a tough trading environment.
On Wednesday, the group — the subject of a takeover bid by French broadcaster Canal+ — said its performance was “mixed, as the effects of a severely stretched consumer environment, combined with foreign currency and other macro headwinds, were countered by accelerated cost savings and cash management initiatives”.
Over the 12-month period, subscriber numbers — measured on a 90-day active basis — fell by 2.8-million and the company had to absorb a R10.2bn hit to its revenue due to local currency depreciation against the dollar.
MultiChoice’s struggle to retain clients is part of a satellite pay-TV industry-wide slump due to the rise of streaming services, changing consumer preferences and economic pressures.
In response, the group — worth R51.32bn on the JSE — has embarked on a cost-cutting programme, while investing in its own streaming service, Showmax. Cost-cutting measures resulted in R3.7bn in savings ahead of its R2.5bn target.
Adjusted core headline earnings per share (HEPS) — the group’s preferred profit measure — swung to a loss of R800m from R1.3bn at the same time last year, due to lower trading profit and hedging losses in the financial year, compared with gains in the previous period, partially offset by smaller losses on cash remittances from Nigeria.
Revenues decreased R5.2bn, or 9% year on year, to R50.8bn owing to an 11% drop in subscription revenue, caused by foreign currency and subscriber losses, and the deconsolidation of the group’s NMSIS insurance business from December 2024. This was partially offset by price increases and growth of new products such as DStv Internet, DStv Stream and Extra Stream.
The group reported negative free cash flow at R516m, from a positive R589m previously.
This set of results was to be expected.
At the halfway stage, in September 2024, the group said it had faced “the most challenging operating conditions in almost 40 years and to generate desired returns”, and that it had been proactive in its focus to “right-size the business for the current economic realities and industry changes”.
Calvo Mawela, MultiChoice group CEO, said: “Our performance reflects both the challenges we’ve faced and the resilience of our teams. While macroeconomic pressures and currency volatility have weighed on our results, our disciplined execution, cost management and investment in new long-term growth opportunities position us well for the future.
“We remain focused on being Africa’s entertainment platform of choice. Our strategy is shaped by developments in our industry such as changes in technology which are driving shifts in consumer behaviour, as well as the impact of a rise in piracy, streaming services and social media.”
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