MultiChoice reports headline loss as DStv subscriber numbers dwindle
As anticipated, struggling pay-TV operator MultiChoice reported a loss for the year ended 31 March – coming in with an adjusted core headline loss of R800 million, down from headline earnings of R1.3 billion a year prior.
In its results, published on Wednesday, the group said it lost 8% or 1.2 million linear (broadcast) subscribers over the year, to 14.5 million. The loss was evenly split between its South African and Rest of Africa subscribers.
It also had to absorb a R10.2 billion negative impact on its top line due to local currency depreciation against the dollar.
Price hikes,
competition
The group, which is under pressure from streaming rivals such as Netflix, said the past two financial years have brought significant financial disruption to economies, businesses, and consumers across sub-Saharan Africa due to challenging macroeconomic conditions.
The group’s overall performance was materially affected by structural changes in the video entertainment industry, including the rise of piracy, streaming services, and social media.
It reported a 9% drop in revenue to R50.8 billion, attributed to an 11% decrease in subscription income due to price hikes, as well as the sale of a 60% stake in its insurance business.
Showmax
and DStv
MultiChoice’s streaming service, Showmax, grew active paying subscribers by 44%, gaining regional market share after relaunching the platform over a year ago.
The group said its trading profit, which declined by R3.8 billion or 49% year-on-year to R4 billion, was materially affected by the R2.3 billion organic increase in trading losses in Showmax and the R5.2 billion in foreign currency revenue losses.
Showmax targets 44 markets across sub-Saharan Africa with the ambition of becoming the leading streaming platform on the continent.
Read: South Africans are scrolling, streaming and swiping more than ever before
The group said DStv Stream subscribers increased by 38%, with revenues up 48%. This underscores the shift to streaming as broadband penetration grows, it said.
MultiChoice also focused on growing DStv Internet, a fixed wireless access service, within the fixed-wireless LTE space, which resulted in DStv Internet subscribers growing 45%, while revenues increased 85%.
Outlook
In the year ahead, management aims to stabilise revenue in its video businesses through targeted customer retention efforts, while driving strong topline growth across its interactive entertainment, fintech, and insurance investments.
The group will also focus on improving operating efficiency, reducing costs, and optimising working capital to safeguard profitability and cash flow, while continuing to work closely with Canal+ to successfully complete its mandatory offer, which is expected to deliver significant long-term value for both companies and their stakeholders.
Last year, Canal+ made a mandatory offer to acquire the MultiChoice shares it does not own, for a consideration of R125 per share.
Recently, the Competition Commission has recommended that the Competition Tribunal conditionally approve Canal+’s proposed acquisition of the MultiChoice Group.
As part of MultiChoice’s response to a changing trading environment, management has set a cost-saving target of R2 billion for the financial year 2026.
Backed by these topline and cost-control measures, it aims to achieve margins in the mid-20s for MultiChoice South Africa, return MultiChoice Africa to profitability with limited funding and reduce trading losses at Showmax.
“Our performance reflects both the challenges we’ve faced and the resilience of our teams,” said MultiChoice Group CEO Calvo Mawela in a statement.
“While macroeconomic pressures and currency volatility have weighed on our results, our disciplined execution, cost management and investment in new long-term growth opportunities position us well for the future.” -Bleak
Loses 1.2m broadcast subscribers in a year.
As anticipated, struggling pay-TV operator MultiChoice reported a loss for the year ended 31 March – coming in with an adjusted core headline loss of R800 million, down from headline earnings of R1.3 billion a year prior.In its results, published on Wednesday, the group said it lost 8% or 1.2 million linear (broadcast) subscribers over the year, to 14.5 million. The loss was evenly split between its South African and Rest of Africa subscribers.
It also had to absorb a R10.2 billion negative impact on its top line due to local currency depreciation against the dollar.
Price hikes, competition
The group, which is under pressure from streaming rivals such as Netflix, said the past two financial years have brought significant financial disruption to economies, businesses, and consumers across sub-Saharan Africa due to challenging macroeconomic conditions.
The group’s overall performance was materially affected by structural changes in the video entertainment industry, including the rise of piracy, streaming services, and social media.
It reported a 9% drop in revenue to R50.8 billion, attributed to an 11% decrease in subscription income due to price hikes, as well as the sale of a 60% stake in its insurance business.
Showmax and DStv
MultiChoice’s streaming service, Showmax, grew active paying subscribers by 44%, gaining regional market share after relaunching the platform over a year ago.
The group said its trading profit, which declined by R3.8 billion or 49% year-on-year to R4 billion, was materially affected by the R2.3 billion organic increase in trading losses in Showmax and the R5.2 billion in foreign currency revenue losses.
Showmax targets 44 markets across sub-Saharan Africa with the ambition of becoming the leading streaming platform on the continent.
Read: South Africans are scrolling, streaming and swiping more than ever before
The group said DStv Stream subscribers increased by 38%, with revenues up 48%. This underscores the shift to streaming as broadband penetration grows, it said.
MultiChoice also focused on growing DStv Internet, a fixed wireless access service, within the fixed-wireless LTE space, which resulted in DStv Internet subscribers growing 45%, while revenues increased 85%.
Outlook
In the year ahead, management aims to stabilise revenue in its video businesses through targeted customer retention efforts, while driving strong topline growth across its interactive entertainment, fintech, and insurance investments.
The group will also focus on improving operating efficiency, reducing costs, and optimising working capital to safeguard profitability and cash flow, while continuing to work closely with Canal+ to successfully complete its mandatory offer, which is expected to deliver significant long-term value for both companies and their stakeholders.
Last year, Canal+ made a mandatory offer to acquire the MultiChoice shares it does not own, for a consideration of R125 per share.
Recently, the Competition Commission has recommended that the Competition Tribunal conditionally approve Canal+’s proposed acquisition of the MultiChoice Group.
As part of MultiChoice’s response to a changing trading environment, management has set a cost-saving target of R2 billion for the financial year 2026.
Backed by these topline and cost-control measures, it aims to achieve margins in the mid-20s for MultiChoice South Africa, return MultiChoice Africa to profitability with limited funding and
reduce trading losses at Showmax.
“Our performance reflects both the challenges we’ve faced and the resilience of our teams,” said MultiChoice Group CEO Calvo Mawela in a statement.
“While macroeconomic pressures and currency volatility have weighed on our results, our disciplined execution, cost management and investment in new long-term growth opportunities position us well for the future.”