MultiChoice, a large media corporation, lost R911 million ($50.2 million) after taxes from April 1 to September 30, 2023. This loss is significant compared to the previous year’s R55 million after-tax profit.
The company made 1% less money, or R28.3 billion. It went from R6.2 billion to R4.8 billion, a 22% drop in operating profit.
MultiChoice’s free cash flow also dropped sharply. 40% less than last year’s R1.8 billion, it was R1.07 billion.
Read also: MultiChoice Showmax to focus exclusively on Africa
MultiChoice’s 90-day numbers reflect mixed luck
MultiChoice added 70,000 Rest-of-Africa DStv subscribers in 90 days. Unfortunately, it lost 486,000 users in South Africa. The entire organization lost 416,000 active users for 90 days. This is the first time this measure has shown DSTV’s general subscriber numbers falling.
MultiChoice South Africa’s outside income fell 3% to R16.54 billion ($905.5 million) from R17.05 billion ($933 million). A 17% reduction in trade profit from R6.3 billion ($345.7 million) to R5.2 billion ($285.3 million) occurred.
Showmax, however, increased outside revenues by 46% from R381 million to R555 million. Trade losses increased from R279 million to R799 million despite rising sales.
MultiChoice, on the other hand, said that the drop in profits was due to things like power outages, higher living costs, and local currencies losing a lot of value against the US dollar.
“The effect was lessened by shifting the focus to keeping subscribers, getting a better mix of customers, and continuing to review prices and cut costs every year,” the company said.
“As a result, the group could keep its trading profit in the Rest of Africa at a positive level (a ZAR2.2bn year-over-year increase) and achieve a 31% trading margin in South Africa.”
MultiChoice also saw a change from a time of solid growth, primarily due to the FIFA World Cup in the previous six months. The filing period also happened at the same time as the start of the Rugby World Cup in early September.
MultiChoice said, “The South African business had to deal with the effects of ongoing high levels of load-shedding as 43% of the days in the reporting period were affected by stage 4–6 load-shedding.”
“The number of subscribers also went down because 311k customers who weren’t bringing in any money were taken off the base because of special load-shedding campaigns.”
MultiChoice invests in premium subscribers, local programming, and World Cup sponsorship
MultiChoice’s premium client base grew 5%, a trend not seen in years. Due to sustained investment in local content, which rose 16% year-over-year, organic content costs rose 4% (with a +10% reported rise).
MultiChoice highlighted its investment in June-aired Shaka iLembe, emphasising its local content commitment. In the first part of the year, the firm funded netball, women’s football, and the Rugby World Cup.
MultiChoice optimised its international content for expansion. Showmax prioritises cash creation and balance sheet protection despite currency, consumer, and medium-term investment cycle concerns.
The variety of international content on MultiChoice promotes cultural understanding. Diverse viewpoints from continuous optimisation make the audience more inclusive and global.
To serve its communities, the corporation prioritises cash production and balance sheet protection.
Stakeholders and industry observers may track MultiChoice’s recovery and financial stability efforts due to its financial troubles.