J
Joshua Fagbemi
Guest
Multichoice has lost about 1.8 million subscribers in the African markets. According to reports, the South African satellite provider’s loss was owing to free-to-air alternatives and economic declination across the continent.
Explicitly, the Pay TV company’s subscription fell by 18% in Nigeria. In other African countries, it dipped by 8% and 19% in Angola and Kenya respectively. It also experienced the highest fall in Zambia, with a 60% decline.
The drop in its subscriber base was attributed to the rise in the DSTV and Gotv subscription packages across the region. This resulted in a 10% revenue decline. Also, the financial half-year of the group recorded 1.8 billion rand (N163.1 billion) which was accustomed to currency depreciation in Nigeria, interest expenses, and other inflationary pressures.
Reacting to the hike in subscription, Multichoice expressed that the price increase was necessary considering the rising cost of operation in the continent. Economic fluctuations like the inflationary stunts in Nigeria and the extreme power outage in Zambia had seriously affected the company’s financial statement.
Multichoice’s sports content has remained its crucial lifeline. Through SuperSport, audiences skyrocketed during the EURO 2024 tournament. However, Multichoice still faces challenges dealing with pirate websites despite introducing a cheap mobile plan for football lovers on Showmax.
In its financial statement released on Tuesday, Multichoice reported a huge decline. The South African pay television company recorded a 99% decline in its half-year profit. The satellite TV provider has tagged the operating environment as “extremely hostile.“
The DStv, SuperSport, and Showmax owner, whose Pay TV business operates across 50 countries in sub-Saharan Africa, said its performance was majorly affected by weaker local currencies. It also pointed out that constrained consumer spending particularly in Nigeria and extreme power disruptions in Zambia marred its headline loss.
“The first half of the 2024 financial year was negatively impacted by severe pressure in the macroeconomic, foreign exchange rate, and consumer environment in key markets, most notably Nigeria and Zambia,” the company said.
Multichoice expressed that its adjusted core headline earnings per share fell to 2 cents per share for the six months ended Sept. 30. This is from 356 cents per share last year. It added that subscriptions fell by 5% in South Africa and 15% across other parts of Africa where it operates.
On revenue, the group’s earnings fell by 10% to 25.4 billion rand ($1.41 billion) on a reported basis. However, it grew by 4% on an organic basis, which excludes the impact of foreign exchange effects, mergers, and acquisitions.
Read More: Multichoice records a 99% decline in its half-year profit as subscriptions fell by 15%.
Multichoice is facing immense challenges due to the influx of streaming services and short-form video content on social media platforms. The company also grew more unpopular in key markets like Nigeria and Kenya after increasing prices of DSTV and Gotv packages in April, July, and November.
“While we have made huge inroads to reduce our cost base, there is still more work to be done. However, our focus extends beyond cost efficiency – we are equally committed to growing the business,” Multichoice Group CEO, Calvo Mawela said.
MultiChoice Group CEO Calvo Mawela
Meanwhile, the group’s revenue increased by 4% year-on-year to 25 billion rand (N2.26 trillion) while its cash flow and liquidity remained positive. The cost optimization initiative has saved the business 1.3 billion rand (N117.8 billion).
“We are making good progress in addressing the technical insolvency that resulted from non-cash accounting entries at the end of the last financial year. We expect to return to a positive net equity position by the end of November this year, supported by a number of developments and initiatives,” Mawela added.
On another positive outlook, the Multichoice streaming platform ‘Showmax’ recorded a 30% growth in paying subscribers. However, the platform is still trying to improve its payment channel integrations and boost efficiency across the African region. Due to the difficulties experienced during restructuring and migration to the Peacock tech stack, Showmax revenues for the YoY fell by 40%.
To broaden its market, Multichoice is in an ongoing plan for an acquisition by French media giant Canal+ in a $3 billion offer. This would expand Multichoice services to Francophone Africa where Canal+ dominates. The deal awaits approval after Multichoice accepts the shares buyout in June of this year.
“This merger allows us to secure better content rates and drive more revenue, especially given our combined presence in both French and English-speaking Africa,” Mawela said.
Explicitly, the Pay TV company’s subscription fell by 18% in Nigeria. In other African countries, it dipped by 8% and 19% in Angola and Kenya respectively. It also experienced the highest fall in Zambia, with a 60% decline.
The drop in its subscriber base was attributed to the rise in the DSTV and Gotv subscription packages across the region. This resulted in a 10% revenue decline. Also, the financial half-year of the group recorded 1.8 billion rand (N163.1 billion) which was accustomed to currency depreciation in Nigeria, interest expenses, and other inflationary pressures.
Reacting to the hike in subscription, Multichoice expressed that the price increase was necessary considering the rising cost of operation in the continent. Economic fluctuations like the inflationary stunts in Nigeria and the extreme power outage in Zambia had seriously affected the company’s financial statement.
Multichoice’s sports content has remained its crucial lifeline. Through SuperSport, audiences skyrocketed during the EURO 2024 tournament. However, Multichoice still faces challenges dealing with pirate websites despite introducing a cheap mobile plan for football lovers on Showmax.
Half-year profit declined by 99%
In its financial statement released on Tuesday, Multichoice reported a huge decline. The South African pay television company recorded a 99% decline in its half-year profit. The satellite TV provider has tagged the operating environment as “extremely hostile.“
The DStv, SuperSport, and Showmax owner, whose Pay TV business operates across 50 countries in sub-Saharan Africa, said its performance was majorly affected by weaker local currencies. It also pointed out that constrained consumer spending particularly in Nigeria and extreme power disruptions in Zambia marred its headline loss.
“The first half of the 2024 financial year was negatively impacted by severe pressure in the macroeconomic, foreign exchange rate, and consumer environment in key markets, most notably Nigeria and Zambia,” the company said.
Multichoice expressed that its adjusted core headline earnings per share fell to 2 cents per share for the six months ended Sept. 30. This is from 356 cents per share last year. It added that subscriptions fell by 5% in South Africa and 15% across other parts of Africa where it operates.
On revenue, the group’s earnings fell by 10% to 25.4 billion rand ($1.41 billion) on a reported basis. However, it grew by 4% on an organic basis, which excludes the impact of foreign exchange effects, mergers, and acquisitions.
Read More: Multichoice records a 99% decline in its half-year profit as subscriptions fell by 15%.
Multichoice reiterates its commitment to bouncing back
Multichoice is facing immense challenges due to the influx of streaming services and short-form video content on social media platforms. The company also grew more unpopular in key markets like Nigeria and Kenya after increasing prices of DSTV and Gotv packages in April, July, and November.
“While we have made huge inroads to reduce our cost base, there is still more work to be done. However, our focus extends beyond cost efficiency – we are equally committed to growing the business,” Multichoice Group CEO, Calvo Mawela said.
MultiChoice Group CEO Calvo Mawela
Meanwhile, the group’s revenue increased by 4% year-on-year to 25 billion rand (N2.26 trillion) while its cash flow and liquidity remained positive. The cost optimization initiative has saved the business 1.3 billion rand (N117.8 billion).
“We are making good progress in addressing the technical insolvency that resulted from non-cash accounting entries at the end of the last financial year. We expect to return to a positive net equity position by the end of November this year, supported by a number of developments and initiatives,” Mawela added.
On another positive outlook, the Multichoice streaming platform ‘Showmax’ recorded a 30% growth in paying subscribers. However, the platform is still trying to improve its payment channel integrations and boost efficiency across the African region. Due to the difficulties experienced during restructuring and migration to the Peacock tech stack, Showmax revenues for the YoY fell by 40%.
To broaden its market, Multichoice is in an ongoing plan for an acquisition by French media giant Canal+ in a $3 billion offer. This would expand Multichoice services to Francophone Africa where Canal+ dominates. The deal awaits approval after Multichoice accepts the shares buyout in June of this year.
“This merger allows us to secure better content rates and drive more revenue, especially given our combined presence in both French and English-speaking Africa,” Mawela said.