DStv’s owner hits financial trouble
MultiChoice has issued a trading statement warning shareholders that it expects to report a net loss in its interim financial results on Thursday.
Last year the company announced earnings per share of R3.17 during the six months between 1 April and 30 September.
This year it expects it to be between R3.71 and R3.87 lower. That’s to say, swing from a net profit to a loss per share of between R0.54 and R0.64.
Similarly, MultiChoice’s headline earnings per share are also expected to take a tumble by between R4.06 and R4.20 from R3.56.
Trading profit is expected to be between 0% and 5% (R0.3bn) higher than the R6.0 billion reported last year.
Excluding mergers and acquisitions and foreign exchange losses, this improves to an increase of between 2% (R0.1bn) and 7% (R0.4bn) higher..
“The board considers trading profit and core headline earnings per share as the two most appropriate indicators of the operating performance of the group, as they adjust for non-recurring and non-operational items,” MultiChoice stated.
It attributed the reduction in earnings and headline earnings per share to higher unrealised foreign exchange losses.
These stem from the translation of MultiChoice’s dollar-denominated liabilities — including satellite transponder leases — and the US dollar’s strength against the South African rand.
“This is further impacted by an increase in foreign exchange losses associated with the repatriation of cash from Nigeria at the parallel rate,” said MultiChoice.
“These exchange losses are considered to be of a temporary nature,” it assured.
MultiChoice’s shares on the JSE were trading 0.57% lower than when it started the day. They are down 2.9% over the past five days, down 6.2% over the past six months, and 2.6% lower year-to-date.
At the time of publication, MultiChoice was trading at R117.91 per share — down from R120.35 at the start of the day.
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