By John Ikani
South African satellite TV giant MultiChoice is facing tough times. The company reported a net loss of 4.1 billion rand ($225.8 million) for the year ending March 31, 2024, marking its second consecutive year in the red.
This news sent shivers down investors’ spines, with MultiChoice’s share price dipping slightly on the Johannesburg Stock Exchange.
The staggering loss is largely attributed to foreign exchange woes. The significant depreciation of the Nigerian Naira against the US Dollar resulted in a net foreign exchange translation loss of a whopping 6 billion rand.
“This follows the depreciation of the NGN against the USD from a closing rate of NGN464.50 in FY23 to NGN1 308.00 in FY24,” explained MultiChoice.
The company’s core business, subscription fees, also took a hit, dropping revenue by 5.9% to 55 billion rand. This decline can be attributed to both a weakening consumer environment and a shrinking subscriber base.
MultiChoice’s subscriber numbers fell by 9% overall, with the “Rest of Africa” segment experiencing a steeper decline of 13%. Nigeria, Zambia, and Angola were particularly affected. South Africa, on the other hand, showed more resilience with only a 5% subscriber decrease.
Despite the financial challenges, MultiChoice CEO Calvo Mawela remains optimistic. He highlighted the company’s efforts to retain customers, manage cash flow, and reduce costs, exceeding initial targets. “The strength of this team, the quality of the underlying business, and the clarity of our strategy” give him confidence in their future, he stated.
However, navigating a weak consumer environment, unfavourable currency exchange rates, and a declining subscriber base will continue to be major hurdles for MultiChoice South Africa.
