Emmanuel OchayiMultiChoice Group Ltd, Africa’s leading pay-TV company, disclosed its third consecutive semi-annual net loss of 1.32 billion rand ($72.4 million) for the six months ending Sept. 30. The company attributed this financial setback to a blend of foreign exchange challenges in Nigeria and ongoing power disruptions in South Africa.
Speaking on the company’s performance, MultiChoice representatives addressed the challenges faced. “After adding 1.4m new subscribers in FY23, subscriber growth in the Rest of Africa was more subdued in 1H FY24,” noted the company. “This was due to the impact of inflationary pressures in key markets like Nigeria.”
Elaborating further, they highlighted specific factors affecting their financials: “Weaker currencies remained a significant impediment to improvements in profitability, with average first-half exchanges falling sharply against the USD.”
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The currency hurdles in Nigeria arose from the mid-June decision to permit the Naira to trade more freely against the dollar, causing a 40% devaluation and necessitating a revaluation of inter-group loans. This move resulted in foreign exchange losses for MultiChoice.
Furthermore, South Africa’s recurring power outages contributed to a 5% decline in the number of active days per subscriber, compounding the company’s financial challenges during the reporting period.
Following this announcement, MultiChoice’s shares witnessed a dip of 0.6% in Johannesburg, closing on Wednesday after earlier plunging by 3.6% to a record low.
Despite these setbacks, MultiChoice is gearing up for a strategic shift. The company intends to relaunch its Showmax streaming service in the latter half of its financial year and introduce a sports betting service in South Africa, building on the success of a similar offering in Nigeria.
The combination of forex-related losses and power supply disruptions has cast a shadow on MultiChoice’s recent financial performance, prompting the company to recalibrate its strategies with new service launches in the pipeline.
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