By Nqobile Dludla
JOHANNESBURG (Reuters) -South African pay television company MultiChoice Group swung into a 706 million rand ($38 million) loss before tax in the year to March, it said on Wednesday, hit by currency volatility and weak consumer spending.
Growing debt woes in many African nations and risk aversion by investors buying African exports have put pressure on foreign currency reserves, creating volatility.
The loss in the year to March 31 compares with a profit before tax of 921 million rand a year before. Shares in the group were down 0.2% at 1448 GMT, against a 1.6% rise in the wider index.
“Volatile and weaker local currencies, power challenges in markets like South Africa, and a weak consumer environment due to rising inflation and high interest rates have created an extremely challenging environment for the group’s customers and operating segments,” MultiChoice said.
Reported group revenue fell 5% to 56 billion rand, but grew 3% when currency swings were stripped out, the owner of Dstv and Showmax video streaming businesses said.
MultiChoice said it will accelerate its cost-saving programme, with a target of 2 billion rand in the new financial year. The company, which operates across 50 countries in sub-Saharan Africa, also plans to cut capital expenditure and prioritise customer retention.
Excluding other items such as interest expenses, the group reported operating profit of 7.1 billion rand last year, down 30% from 2023’s 10.2 billion rand.
Its active subscribers fell 9% to 15.68 million, mainly due to a 13% decline in the Rest of Africa business as mass-market customers in countries like Nigeria had to prioritise basic necessities over entertainment.
The South African business recorded a 5% decline in subscribers, as many would-be customers could not afford to consistently pay for its product or chose not to subscribe due to rolling power cuts last year.
Showmax, which re-launched in February, is showing encouraging early traction, with its paying subscriber base growing 16% from the migrated base at relaunch to year-end, it added.
($1 = 18.4318 rand)
(Reporting by Nqobile Dludla, Editing by Louise Heavens and Jan Harvey)
