MultiChoice Reports USD 217 Million Annual Loss Due to Macroeconomic Challenges

 

Key Highlights

  • MultiChoice, a South African pay-tv group, reported a significant annual loss of USD 217 million (ZAR 4 billion) on revenues of USD 3 Billion (ZAR 56 billion).
  • In markets such as Nigeria and Ghana, devaluation and inflation have diminished consumer spending power, reducing active subscribers.
  •  FY24 posed significant challenges for MultiChoice’s Rest of Africa segment (all markets outside South Africa), with the company navigating the most difficult macroeconomic conditions since 2016.

MultiChoice, a South African pay-tv group, reported a significant annual loss of USD 217 million (ZAR 4 billion) on revenues of USD 3 billion (ZAR 56 billion). This loss is largely due to macroeconomic challenges, which prompt shareholders to consider whether ownership by Canal+ could offer some relief.

In markets such as Nigeria and Ghana, devaluation and inflation have diminished consumer spending power, reducing active subscribers. For instance, in Nigeria, active subscribers fell by 1.2 million to 8.1 million, decreasing the country’s revenue contribution to MultiChoice’s Rest of Africa segment from 44% to 35%. In addition, the group faced remittance losses of USD 59 million from Nigeria due to foreign exchange market volatility, though this was an improvement from USD 132 million in FY 2023. The company noted that “mass-market customers in countries like Nigeria had to prioritise basic necessities over entertainment.”

The fiscal year 2024 (FY24) posed significant challenges for MultiChoice’s Rest of Africa segment (all markets outside South Africa), with the company navigating the most difficult macroeconomic conditions since 2016. Even in its home market, South Africa, where the business demonstrated resilience, active customers declined by 5%, ending the year with 7.6 million active subscribers. Consistent load shedding (scheduled power outages) made customers without backup power hesitant to subscribe due to uncertainty about being able to watch TV.

Furthermore, premium customers (including Premium and Compact Plus packages) decreased by 8% across all markets, and the mass market tier dropped by 2%. Despite implementing cost-saving measures, including reducing subsidies on decoders and achieving USD 103.2 (ZAR 1.9 billion) in cost savings, the company could not avoid the economic realities of its operating markets. These results are unlikely to impress investors and highlight MultiChoice’s difficult operating environment.