MultiChoice warns of profit slump
MultiChoice has informed shareholders that it expects to report a trading profit decline of between 19% and 23% for the year ended 31 March 2024.
The company attributed the decline to the foreign exchange impact from weaker currencies against the US dollar and year-on-year Showmax trading losses.
However, it said it expects profit to increase year-on-year on an organic basis, which excludes the impact of foreign exchange effects and mergers and acquisitions.
“Despite the weak operating environment and an additional R1.4 billion in Showmax trading losses YoY, group trading profit on an organic basis is expected to increase YoY,” said MultiChoice.
“However, after absorbing a R4.5 billion foreign exchange impact from weaker currencies against the USD, trading profit on a reported basis is expected to be lower than the year before.”
At the same time, MultiChoice expects its loss per share and headline loss per share to increase for the year ended 31 March 2024.
It said the negative impact of a weak macroeconomic environment, increased investment in Showmax, and the sharp depreciation of the naira against the US dollar were to blame.
“The impact of the sharp depreciation in the Nigerian naira against the US dollar resulting in foreign exchange losses on the non-quasi intergroup loans with MultiChoice Nigeria of R3.6 billion,” said MultiChoice.
“The group’s expected loss per share has also been impacted by a once-off impairment of IT systems of R1 billion, due to a re-assessment of business needs in the context of an extremely challenging operating environment.”
The broadcaster emphasises that the financial information provided is based on the draft consolidated financial results. It said it is finalising its consolidated annual financial statements for the year.
“These draft financial results provide the directors with a reasonable degree of certainty that the financial results for the current year will differ by at least 20% from the financial results of the previous corresponding year,” said MultiChoice.
The table below summarises MultiChoice’s draft consolidated financial results.
| Figure | Metric | Figure in year ended March 2024 | Expected movement range for year ended March 2024 | Expected % increase/decrease |
| Financial information per Companies Regulations | ||||
| Loss per share | cents | (815) | +(106) to +(139) | -13% to -17% |
| Headline loss per share | cents | (301) | +(409) to +(421) | -136% to -140% |
| Non-IFRS measures | ||||
| Trading profit | R billions | 10.0 | -1.9 to -2.3 | -19% to -23% |
| Trading profit (organic) | R billions | 10.0 | +2.2 to +2.6 | +22% to +26% |
| Trading profit (organic, excl. Showmax) | R billions | 10.0 | +3.6 to +4.0 | +36% to +40% |
| Core headline earnings per share | cents | 828 | -298 to -331 | -36% to -40% |
| Adjusted core headline earnings per share | cents | 388 | -70 to -85 | -18% to -22% |
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