Media giant MultiChoice has reported a substantial after-tax loss of R911 million ($50.2 million) for the six months ending September 30, 2023, marking a significant downturn from the R55 million after-tax profit reported in the same period last year.
The company also witnessed a 1% decline in revenue, dropping from R28.7 billion to R28.3 billion, with operating profit falling 22% from R6.2 billion to R4.8 billion.
Free cash flow for MultiChoice experienced a notable 40% decrease, standing at R1.07 billion compared to the previous year’s R1.8 billion.
Regional Variances Affect MultiChoice’s 90-Day Metrics
In terms of active subscribers, there was growth of 70,000 DStv subscribers in the Rest-of-Africa division, but South Africa faced a setback, losing 486,000 subscribers. This resulted in a net decline of 416,000 90-day active subscribers across the entire group, marking the first instance of a decrease in DStv’s overall subscriber numbers.
MultiChoice South Africa reported a 3% dip in external revenue, falling from R17.05 billion to R16.54 billion, while trading profit experienced a substantial decline, dropping over 17% from R6.3 billion to R5.2 billion. In contrast, Showmax saw a significant increase in external revenue, rising by 46% from R381 million to R555 million, although trading losses escalated from R279 million to R799 million.
MultiChoice attributed the decline in profitability to factors such as power interruptions, heightened cost of living pressures, and significant depreciation of local currencies against the US dollar. Despite these challenges, the company highlighted a focus on subscriber retention, an improved customer mix, and ongoing pricing and cost-saving disciplines to mitigate the impact.
The company acknowledged a transition from a period of robust growth, notably associated with the FIFA World Cup, and cited the effects of ongoing high levels of load-shedding in South Africa as a contributing factor. MultiChoice also mentioned the decision to remove 311,000 non-revenue generating customers linked to special load-shedding campaigns from its subscriber base.
MultiChoice Thrives in Premium Subscribers and Sponsorships
On the positive side, MultiChoice reported a 5% growth in its premium customer base, a 4% increase in total content costs, and continued investment in local content. Despite operational risks and the medium-term investment cycle for Showmax, the company remains committed to cash generation and maintaining a strong balance sheet.
MultiChoice’s focus on showcasing societal diversity through its international content portfolio aligns with ongoing efforts to bridge cultural gaps and foster understanding.
While the financial challenges raise concerns about the company’s fiscal health, MultiChoice’s strategies for recovery and future stability will be closely monitored by stakeholders and industry analysts.