Multimedia group Multichoice has reported a massive R911 million loss for the six months ended September 2023 as it bled subscribers and took a hit from foreign exchange volatility.
Revenue for the period was down marginally (1%) to R28.3 billion from the R28.6 billion recorded in HY22. Operating profit was down by 22% to $.8 billion from R6.2 billion before.
The group extended its loss per ordinary share from 60 cents in 2022 to a loss of 310 cents per share in 2023. Headline loss per share dropped from 58 cents to 289 cents per share.
Pre-tax profit of R980 million was down 57% from R2.3 billion the year before – and the loss after tax ended at R911 million, down from the small profit of R55 million in HY22.
The group reported a loss for the period of R911 million. Given the results for the period, no interim dividend was declared.
Multichoice said that it has “executed well on its operation objectives”, despite operating in an environment that has been hamstrung by power interruptions, cost of living pressures and depreciation in local currencies against the US dollar.
“Profitability came under pressure, but the impact was mitigated by a change in focus towards subscriber retention, an improved customer mix, as well as ongoing annual pricing and cost-saving disciplines,” it said.
Foreign exchange currency losses and adjustments took a huge bite out of the group’s bottom line, knocking headline earnings by R2.26 billion in the period.
South Africa losses
The group said that the South African business had to contend with the ongoing high levels of load shedding, with 43% of the days in the reporting period impacted by stage 4 to 6 load shedding.
In total, SA customers were 5% lower at 8.6 million. However, the group noted that premium customers showed 5% growth – reflecting a positive trend for the first time in years.
Active customers declined to 7.8 million.
Losses in subscribers in South Africa were also impacted by the group’s decision to remove 311,000 non-revenue-generating customers from the base. These customers were linked to the special load shedding campaigns the group ran.
“Although the Premium and Compact bases showed improved stability compared to the latter part of FY23, mass-market subscribers are proving less resilient and more reluctant to pay when uncertainty around the ability to consume pay-TV exists,” it said.
Multichoice said its focus is to work on efficiencies in its operating expenditure and get optimal returns on all capital deployed.
At the same time it want to “optimise” pricing strategies and its customer mix, including content monetisation.
It said that the second half of the year will be important for its strategy to expand beyond Africa and into the broader ecosystem of interactive entertainment and consumer services.
This is being led by the relaunch of Showmax and with KingMaker’s entry into the local sports betting market.
Read: Big blow for Multichoice