{"id":828024,"date":"2025-06-13T07:00:00","date_gmt":"2025-06-13T05:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=828024"},"modified":"2025-06-13T04:35:36","modified_gmt":"2025-06-13T02:35:36","slug":"multichoice-is-closing-the-taps","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/828024\/multichoice-is-closing-the-taps\/","title":{"rendered":"DStv owner closing the taps"},"content":{"rendered":"\n

DStv-owner Multichoice is significantly cutting costs in South Africa, even if its stated R3.7 billion in savings raises eyebrows.<\/p>\n\n\n\n

The group declared a profit of R1.8 billion in the financial year ended 31 March 2025, which marked a massive improvement from the losses of R2.9 billion and R4 billion in 2023 and 2024, respectively.<\/p>\n\n\n\n

Several elements returned the broadcaster and streamer to a favourable position, including billions of rands in cost savings and a stabilisation in currencies from the rand\u2019s appreciation against the dollar.<\/p>\n\n\n\n

The group also got a boost from selling 60% of its shareholding in its insurance business (NMSIS) to Sanlam, which helped push it into profit.<\/p>\n\n\n\n

A standout in the results was Multichoice achieving cost savings of R3.7 billion over the financial year, well ahead of its initial target of R2 billion.<\/p>\n\n\n\n

However, when BusinessTech analysed the income statement, only a much lower figure of around R1.5 billion in cost savings could be tallied.<\/p>\n\n\n\n

This included savings of R300 million in the cost of providing services and the sale of goods, as well as a R1.2 billion decrease in selling, general and administrative costs.<\/p>\n\n\n\n

This left questions over where the other R2.5 billion in stated cost savings were found.<\/p>\n\n\n\n

Multichoice CFO Tim Jacobs explained that the group looks at two types of costs in its base: realised costs and unavoidable costs.<\/p>\n\n\n\n

Unavoidable costs are those that the business simply cannot cut in the normal scope of operations, such as essential reinvestment into the business<\/mark><\/p>\n\n\n\n

Realised costs and associated savings are those within the company’s control, which could include renogiations with stakeholders and what content it purchases from distributors. <\/mark><\/p>\n\n\n\n

Jacobs said that Multichoice essentially refers to cost savings of R3.7 billion as realised savings, and not an absolute saving on costs as derived from its income statement.<\/p>\n\n\n\n

He added that the second half of the financial year was also better for the group on this metric, where it saved R2.4 billion from the overall R3.7 billion figure.<\/p>\n\n\n\n

The group’s results showed that a large amount of its realised savings came from content, accounting for 42% of the total savings.<\/p>\n\n\n\n

Other saving areas came from its contract renegotiation, sales and marketing, subsidies, as well as technology and transmission.<\/p>\n\n\n\n

Although some may prefer to use the income statement to see the group’s cost management, savings of either R1.5 billion or R3.7 billion still highlight a company that is tightening the tap on spending.<\/p>\n\n\n

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Source: MultiChoice Results Presentation<\/figcaption><\/figure><\/div>\n\n\n

No longer technically insolvent<\/strong><\/h2>\n\n\n\n

The return to profit also saw a return to positive equity, with the company no longer technically insolvent.<\/p>\n\n\n\n

A company is technically insolvent when its liabilities outweigh its assets, which means that it cannot cover its debts if liquidated.<\/p>\n\n\n\n

While technical insolvency does not mean a company is bankrupt, it does show an increased likelihood that it will head in that direction, if left uncheked. <\/p>\n\n\n\n

As reported by MyBroadband<\/a>, Multichoice returned to a positive equity position over the past year, Although its assets decreased over the period, its liabilities decreased more.<\/p>\n\n\n\n

Importantly, the group saw improvements in its lease liabilities, long-term loans, and tax liabilities over the financial year.<\/p>\n\n\n\n

Regarding long-term loans, the group made an early repayment of R927 million on the R12 billion syndicated term loan concluded in the 2023 financial year.<\/p>\n\n\n\n

The R1.2 billion in after-tax upfront proceeds from the NMSIS sale allowed for the reduction in the loan.<\/p>\n\n\n\n

The group reported a 10.5% decrease in assets, mainly due to a 17.6% drop in its current assets.<\/p>\n\n\n\n

The most significant contributors were decreased programme and film rights, which could be seen in the drop in content costs, and a reduction in cash and cash equivalents.<\/p>\n\n\n\n

Regarding liquidity, it holds R5.1 billion in cash and cash equivalents, and retains access to R3.0 billion in undrawn general borrowing facilities.<\/p>\n\n\n

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\n","protected":false},"excerpt":{"rendered":"

Multichoice has significantly cut its expenditure and strengthened its balance sheet over the last year, with the group now in a postive equity position. <\/p>\n","protected":false},"author":95,"featured_media":694107,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[78,1253],"class_list":["post-828024","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\/828024","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\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=828024"}],"version-history":[{"count":7,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/828024\/revisions"}],"predecessor-version":[{"id":828078,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/828024\/revisions\/828078"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/694107"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=828024"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=828024"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=828024"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}