DStv-owner MultiChoice is gearing up for potential price increases amid mounting financial challenges as the company struggles to maintain a healthy balance sheet.<\/p>\n\n\n\n
In an interview with Daily Investor, MultiChoice CFO Tim Jacobs said inflation-level price increases for DStv are necessary to ensure sustainable growth and the continued delivery of high-quality content.<\/p>\n\n\n\n
\u201cFor many years, especially in South Africa, we have priced our products at less than half of inflation. We\u2019ve been concerned and watching the consumer\u2019s wallet,\u201d Jacobs said.<\/p>\n\n\n\n
However, the pay-TV provider is under increased pressure, reflected in the company\u2019s latest results.<\/p>\n\n\n\n
MultiChoice\u2019s results for the six months ended 30 September 2023 revealed a 1% drop in revenue to R28.33 billion, with its South African revenue falling by 3%.<\/p>\n\n\n\n
It also reported a loss of R911 million, a massive decline from the R55 million profit over the same period last year.<\/p>\n\n\n\n
This comes despite the 4.3% subscription fee hike for DStv packages in South Africa that came into effect earlier this year.<\/p>\n\n\n\n
\u201cWe are actually to the point now, with load-shedding and our revenue number coming under so much pressure, that we have to be a little bit more disciplined about recovering some of our costs,\u201d Jacobs explained.<\/p>\n\n\n\n
\u201cThe chances are that we\u2019re gonna be looking at inflationary price increases, both in the South African market and the rest of Africa<\/strong>.\u201d<\/p>\n\n\n\n Jacobs said the company would ensure \u201cthat we can continue delivering great content to our customers because that\u2019s actually why they\u2019re buying our products\u201d.<\/p>\n\n\n\n In the first six months of the 2024 financial year, DStv has brought customers three World Cups and popular shows like Shaka Ilembe and Big Brother Night.<\/p>\n\n\n\n \u201cBut to do that, we have to keep delivering financial results for our investors,\u201d he said. \u201cWe\u2019re trying to balance the discipline of being super efficient in our business with the stuff that we can control.\u201d<\/p>\n\n\n\n For example, he said MultiChoice exceeded its cost-saving targets in the first six months of the 2024 financial year.<\/p>\n\n\n\n The company had a full-year target of R800 million and has already delivered R500 million. MultiChoice is not raising the full-year target to R1 billion.<\/p>\n\n\n\n \u201cWe also managed to reduce our subsidies by R900 million. Some of that was in South Africa, and some of that was in the rest of Africa,\u201d he said.<\/p>\n\n\n\n
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