{"id":799456,"date":"2024-11-12T13:59:00","date_gmt":"2024-11-12T11:59:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=799456"},"modified":"2024-11-12T14:03:57","modified_gmt":"2024-11-12T12:03:57","slug":"dstv-owner-in-deep-trouble","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/799456\/dstv-owner-in-deep-trouble\/","title":{"rendered":"DStv owner in deep trouble"},"content":{"rendered":"\n

MultiChoice\u2019s latest financial results reveal that revenue plummeted, losses worsened, and technical insolvency deepened.<\/p>\n\n\n\n

On Tuesday, MultiChoice revealed its consolidated interim financial statements for the period ended 30 September 2024. It was a disaster.<\/p>\n\n\n\n

Revenue for the six months declined by 11% to R24.8 billion, and operating profit declined by 49% to R2.5 billion.<\/p>\n\n\n\n

MultiChoice\u2019s loss for the six-month reporting period increased to R1.8 billion, much worse than the previous period\u2019s loss of R911 million.<\/p>\n\n\n\n

It was not only MultiChoice\u2019s income statement that read like a horror movie. Its balance sheet was equally disastrous.<\/p>\n\n\n\n

The operator\u2019s assets declined from R43.9 billion to R41.5 billion, while its liabilities were relatively flat at R44.2 billion.<\/p>\n\n\n\n

That means that MultiChoice remained technically insolvent. However, its balance sheet worsened significantly over the last year.<\/p>\n\n\n\n

Unsurprisingly, MultiChoice\u2019s operational data reflected the dismal financial performance over the interim period.<\/p>\n\n\n\n

MultiChoice\u2019s DStv and other subscribers plummeted from 16.7 million to 14.9 million over the last year.<\/p>\n\n\n\n

The subscriber number decrease included a 5% reduction in South Africa and a 15% decline in the Rest of Africa.<\/p>\n\n\n\n

MultiChoice highlighted that Showmax\u2019s paying subscriber base increased 50% year-on-year. However, this number excluded discontinued services.<\/p>\n\n\n\n

Showmax\u2019s revenue declined from R704 million to R469 million, and its loss increased from R799 million to R2.4 billion.<\/p>\n\n\n\n

That means that Showmax contributed virtually nothing to MultiChoice\u2019s top line but added over R2.4 billion to the company\u2019s losses.<\/p>\n\n\n\n

MultiChoice continues to promote the new Showmax 2.0 as the company’s future and its growth engine.<\/p>\n\n\n\n

However, MultiChoice latest financial results have not shown this potential. Its performance was so poor that investors should question its viability.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

MultiChoice putting on a brave face<\/strong><\/h2>\n\n\n\n

Despite the dismal financial performance, MultiChoice highlighted a few positive aspects in its latest results announcement.<\/p>\n\n\n\n

It said it experienced a lower subscriber attrition rate in the linear pay-TV subscriber base versus the six months ended 31 March 2024.<\/p>\n\n\n\n

The company\u2019s trading profit margin in South Africa was maintained in the low 30s in the seasonally stronger first half.<\/p>\n\n\n\n

Its cost optimisation efforts delivered R1.3 billion in savings, with the full-year target increased to R2.5 billion from the R2.0 billion set at the beginning of the financial year.<\/p>\n\n\n\n

In addition to the group\u2019s cost savings program, decoder subsidies were reduced by a further R0.4 billion across South Africa and Rest of Africa.<\/p>\n\n\n\n

Free cash flow and adjusted core headline earnings were both positive despite external macro and currency headwinds.<\/p>\n\n\n\n

MultiChoice also said it maintained the positive momentum in DStv Stream and Extra Stream, DStv Internet, DStv Insurance, and the group\u2019s sports betting and fintech investee businesses.<\/p>\n\n\n\n

It added that it made meaningful progress on the Canal+ transaction. It includes submitting a merger control filing with the South African Competition Commission.<\/p>\n\n\n\n

MultiChoice added that it is also engaging with other regulatory authorities regarding the Canal+ deal.<\/p>\n\n\n\n

It added that it anticipates resolving the negative equity position by the end of November this year.<\/p>\n\n\n\n

Despite trying to remain upbeat about its position, the reality is that MultiChoice is in deep trouble.<\/p>\n\n\n\n

If the Canal+ deal does not go through, the share price will plummet, and the company may be forced to consider a capital raise.<\/p>\n\n\n\n

For this reason, many analysts have advised shareholders to sell their MultiChoice shares and look for value elsewhere.<\/p>\n\n\n\n

\n\n\n\n

Read: South Africans are dumping DStv<\/a><\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

MultiChoice\u2019s latest financial results reveal that revenue plummeted, losses worsened, and technical insolvency deepened.<\/p>\n","protected":false},"author":10,"featured_media":642271,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[78,1253],"class_list":["post-799456","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-dstv","tag-multichoice"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/799456","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=799456"}],"version-history":[{"count":6,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/799456\/revisions"}],"predecessor-version":[{"id":799469,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/799456\/revisions\/799469"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/642271"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=799456"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=799456"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=799456"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}