MultiChoice Group Limited’s interim financial report up to 30 September 2023 showed a notable decline in profitability and revenue trends.
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Africa’s largest media conglomerate’s revenue for the financial year ending 30 September 2023 totalled R28.3 billion, a 1% decrease from the R28.65 billion recorded in the same period in 2022.
In its annual financial report, released on Wednesday, Multichoice attributed the negative revenue outcome to weaker local exchange rates and decreased subscribers, despite inflation-driven price hikes.
Subscription fees, a major revenue component, fell from R23.8 billion to R23.337 billion.
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In the midst of these financial challenges, CEO Calvo Mawela highlighted the company’s focus on developing as a leading entertainment platform across sub-Saharan Africa.
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“We remain focused on developing our leading entertainment platform that caters for consumer needs across sub-Saharan Africa, on leveraging our footprint to build a differentiated ecosystem and on developing additional revenue streams,” he said.
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The company reported a significant headline loss of R1.2 billion, a stark increase from a loss of R248 million in the previous year, indicating a worrying downturn in profitability. This was further reflected in the rise in basic and diluted headline loss per share.
Interest expenses for MultiChoice rose from R692 million to R874 million, primarily due to a higher average debt balance, suggesting an increased debt burden.
However, the company saw a silver lining with interest income rising from R99 million to R223 million.
MultiChoice recorded a net foreign exchange translation loss of R2.9 billion, compared to a loss of R3 billion in the previous year, highlighting the significant impact of currency fluctuations, particularly the rand’s sustained depreciation against the dollar.
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Investments in associates and joint ventures showed minor growth, from R4.8 billion to R4.9 billion. The company’s total commitments decreased from R47.8 billion to R42.6 billion, indicating a reduction in future financial obligations.
However, contingent tax liabilities of approximately R500 million were noted, representing potential tax exposures.
Despite the financial pressures from ongoing power interruptions, cost of living increases, and currency depreciation, MultiChoice’s strategy to prioritise subscriber retention and optimise costs helped maintain a positive trading profit margin.
