South African pay-TV group MultiChoice slides into annual loss

South African pay television company, MultiChoice Group, reported a pre-tax loss of $38 million for the financial year ending March 31, 2024. The loss is attributed to currency volatility, weak consumer spending, and challenging economic conditions across its markets. Reuters highlighted that growing debt in African nations and risk aversion among investors in African exports have pressured foreign currency reserves, exacerbating volatility.

MultiChoice’s revenue dropped by 5% to 56 billion rand, though it saw a 3% growth when adjusted for currency fluctuations. The company, which owns Dstv and Showmax, cited volatile local currencies, power issues in markets like South Africa, and rising inflation and interest rates as key challenges impacting both its customers and operational segments. To address these challenges, MultiChoice plans to accelerate its cost-saving program, aiming to save 2 billion rand in the new financial year, reduce capital expenditure, and focus on customer retention.

The company experienced a 9% decline in active subscribers, dropping to 15.68 million. This decline was most pronounced in the Rest of Africa segment, where mass-market customers in countries like Nigeria had to prioritize basic necessities over entertainment, leading to a 13% reduction. In South Africa, subscribers fell by 5%, driven by affordability issues and the impact of rolling power cuts.

Source: Reuters