MultiChoice, the leading South African TV company, reported a pretax loss of 706 million rand ($38 million) for the fiscal year ending in March, primarily due to weak local currencies and a decline in subscribers.
This loss is a stark contrast to the 921 million rand profit before taxes reported the previous year and was exacerbated by a nine percent drop in subscriptions.
The company cited several challenges, including volatile and weaker local currencies, power issues in markets like South Africa, and a difficult consumer environment marked by rising inflation and high interest rates.
South Africa, in particular, faced 275 days of rolling power cuts, discouraging potential subscribers without backup power solutions.
Despite a five percent decline in group revenue to 56 billion rand, MultiChoice noted that if currency fluctuations were excluded, revenue would have seen a three percent increase.
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To navigate these challenges, MultiChoice plans to accelerate its cost-saving program, focus on customer retention, leverage sports renewals, and further develop local content.
One bright spot for MultiChoice is its Showmax video streaming business, which relaunched in February and has shown “encouraging early traction,” with a 16 percent growth in its paying subscriber base.
Meanwhile, Canal+, which already owns over 35% of MultiChoice, is pursuing a buyout attempt. In April, Canal+, a subsidiary of the Vivendi group led by billionaire Vincent Bollore, made a firm offer to acquire all remaining MultiChoice shares it does not currently own.
The offer was set at 125 rand per share, a price deemed “fair and reasonable” by an independent board appointed by MultiChoice.
Canal+ has a significant presence in Africa, operating in 25 countries through 16 subsidiaries and boasting eight million subscribers. Its investment in MultiChoice has strengthened its foothold in English-speaking and Portuguese-speaking nations across the continent.
As Africa’s largest pay TV enterprise, MultiChoice is navigating through a challenging period but remains focused on strategic initiatives to stabilize and grow its business amid the buyout interest from Canal+.
(AFP)