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South Africa’s leading TV broadcaster, MultiChoice, announced a pretax loss of 706 million rand ($38 million) for the fiscal year ending in March, citing weak local currencies and a decline in subscribers as key factors. This follows a 921 million rand profit before taxes reported the previous year.
The company’s financial difficulties are occurring amid a takeover bid by France’s Canal+, which already owns over 35% of MultiChoice’s shares. Canal+ is a subsidiary of the Vivendi group, led by billionaire Vincent Bollore.
“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,” MultiChoice stated.
The company experienced a 9% drop in subscriptions, exacerbated by South Africa’s 275 days of rolling power cuts, which deterred potential customers without backup power. Group revenue also fell by 5% to 56 billion rand. However, MultiChoice noted that excluding the impact of currency fluctuations, revenue would have increased by 3%.
Despite these challenges, MultiChoice remains Africa’s largest pay TV enterprise. The firm plans to accelerate cost-saving measures, focus on customer retention, leverage sports renewals, and further develop local content. Showmax, its video streaming service re-launched in February, has shown “encouraging early traction” with a 16% increase in its paying subscriber base.
In April, Canal+ made a firm offer to acquire the remaining MultiChoice shares it does not currently own, offering 125 rand per share. An independent board appointed by MultiChoice deemed the offer “fair and reasonable.” Canal+ operates in 25 African countries and has eight million subscribers, enhancing its presence in English-speaking and Portuguese-speaking markets through its stake in MultiChoice.
Source: AFP
